Hooray for Rite Aid!

So what I haven't shared about my self is that I have been investing in the stock market since last year. I first became supremely interested in money at the age of 9. My parents had checked out several financial books and I took one to read (Rich Dad Poor Dad; I recommend you read it, it'll really change your views on money). Ever since then, I've been in love with learning more about economics, finance, and business in general. During my sophmore year, read the book One Up on Wall Street, and finally decided (with the help of a friend who was already in the market) to start investing on my own. My parents were supportive and let me use a subsection of their account to "experiment". It's actually gone quite well; I've made an aggregate 28.98% gain over the last year, and now feel quite comfortable finding stocks.

Still, I find it's a learning experience: I once tried a penny stock without properly scouting it out and lost about $300 in a week. On the flipside, I spotted a proper turnaround in Rite Aid (RAD) and bought in on it when it was $3.54 and now it's a two bagger! The satisfaction of being right comes with a caveat however: I had to sell it at 5.54 because the IRS decided to tax my account. My mom decide it wasn't worth the hassle of having to file another tax return. I was more upset with the fact that $500 out of the $1500 I earned was going to the government. Now I know firsthand why so many people don't like the IRS.... (NSA, if you're watching, sorry, but I'm just telling it like it is)

Even though Rite Aid has jumped 10fold over the last few years, I still think it will keep rising. Management has done a fantastic job shutting down extraneous stores in order to cut costs, while leading an overall restructuring that has led the company to several consecutive quarters of increasing profits.  Naysayers point out the competition such as Walgreenes and CVS Pharmacy, as well as the fact that many of Rite Aid's patents on their medication will expire in 2015. However, I simply think that as the baby boomers age, the size of the market for pharmaceuticals will continue to expand, helping ease the problem of competition. Also, they introduced a new loyalty plan about a year ago, which will help them secure the fan base they currently have. In addition, while I don't have any direct scientific studies I could cite as proof (although I'm sure one could google them up), I'm pretty sure not many people buy the generic version of any medication. Brand recognition is very powerful, and that's why people still buy Advil over it's much less expensive, biologically identical counterparts. Overall, Rite Aid's gameplan is to continue this turnaround by trimming more dead stores off, while improving what they already have. This company already generates millions of dollars in revenue, so it'll be able to raises its bottom line simply by reducing debt. That's a win for me!

Another company I'm quite interested in right now is Ford. I'm also quite flummoxed by them, as I feel they are WAY undervalued. True, they've had a major slowdown in America in the last few months, but who in their right mind would go down to the car dealership to buy a car when America was experiencing one of the worst winters in history? I'm actually impressed Ford sold anything! In addition their sales in China have continued to rise. This is essential because if they get into China, they'll have not just hundreds of millions, but over a billion new customers. Ford's inventory has piled up, so I'd expect them to continue selling cars at a discount just to shift inventory, which explains their weak quarterly earnings. But now, spring is here, and that inventory is ready to disappear! And just a side note: Ford's F150 is still the best selling car in America (over 25 years straight!). Like I said, brand loyalty is powerful!

Something Happy for the Week: My Dad broke the laws of physics. He litterally grabbed the egg, put it on the center of the table and tried to balance it for several minutes. Then he moved it towards the corner of the table where he felt it was "right" and set it upright....we've left it standing their for a few days now. 

Something Random: The answer to "How many chucks would a wood chuck chuck if a wood chuck could chuck wood" = No chucks: If you read the sentence carefully to yourself, and think back to biology, then you'll realize this question has to do with evolution. Whatever this "woodchuck" is, it doesn't need to chuck wood, thus it hasn't evolved to chuck wood. So even if a wood chuck could chuck wood it just wouldn't as chucking the wood would only waste energy with no clear purpose