Welcome to Rye Country Day's Economic Blog. Here you will find perspectives by students taking Economics at Rye Country Day School. It is meant to be a forum where students can openly express their ideas and take positions on relevant economic issues. I urge everyone to participate in presenting their own ideas in an open manner so that we can all learn from each other. Regardless of whether you are currently taking Economics, everyone is invited and encouraged to comment on articles and get involved. Feel free to e-mail me, Alex Osborne at alexander_osborne@rcds.rye.ny.us , with comments or suggestions.

Saturday, December 16, 2006

Featured Entry - Investing Ahead of The Crowd


People invest their money in the stock market searching for more maximum gains that are not availible in fixed-rate interest CD's or Money Market Accounts. With the chance for a higher reward, the higher risk is certainly there. CDs are one of the safer investments someone can make yet people feel as if a measly 5% ROI is not enough in the expensive and materialistic world we are living in. Investors tend to put their money in companies that they feel are undervalued and will either sign more contracts in the future, or have more demand for their products. The key to success in the market is certianly being "ahead of the crowd" and investing in stocks that do not attract much attention....yet. I decided to take a look at today's news and see if there are any markets that are "untapped" and ready to be invested in. Global Warming seems to be a big issue now; in my hometown we have yet to see one day of snow and it is already December 15th. A smart investor would see how he or she could take advantage of this issue. With warmer weather all year round certain products will be used more and certain less. Natural Gas, Sleds, and Snow Apparel are the first few products that would be less demanded were the weather to constantly be warmer. Outdoor sports such as golf and tennis would be played more. I beleive Global Warming is seen as being too far in the future to currently take interest in financially, but after noticing that I have yet to see any snow this year, I believe this is the right time to start looking at options in the Global Warming field. I believe any investor who does his "homework" and figures out a product that will be in high demand in the future or in low demand will be a successful investor and the future will hold huge gains.

-Alex Osborne

2 comments:

Christian said...

It would definitely seem that investing ahead of the crowd is the key to huge gains in the stock market. The ideal is that since the company or product is not yet popular, buying stock for it will be quite cheap and then when the company sky rockets, the stock you orignally bought for a little is now worth a lot. Investing in a company that is already doing well is likely to return very little profit if any at all and investing that is doing very poorly may just result in a loss of your money altogether. The key as Steve Mandel notes is to invest in the new up and coming company who has the potential to be great. Though global warming seems to be a big issue and will definitely have some effects on the market, I believe we should look towards computer companies for the next big investment. Companies like IBM and Intel are constantly pushing foward to reinvent the way computers function and think. Though these companies are already doing quite and high reward doesn't seem forseeible, the truth of the matter is that these companies as well as many others are in a technological race. I believe companies like Intel and IBM are on the verge of something truly extrodinary for computers, and the people who invest early will be way ahead of the crowd and reep enormous benifits.

Matt said...

It seems to me global warming might be a wise investment conceptually. Though, it would be difficult to figure out what it would directly impact, because obviously each area of the globe will respond differently. I don't know how many people you could cater to by investing in the golf club industry. Not many starving Nigerians care to play 18-holes regardless of the weather. Necessities would be at the top of any investor's list, but what can be classified as a necessity? For instance, it rains everywhere so one would assume the umbrella man would be making a fortune. But how many people actually make use of an umbrella? Internationally, a small percentage I would assume. People are pouring money into energy conservation. But few are taking advantage of it. Nobody wants to invest in the future. They only need to invest in the now. They invest in themselves, but only based on where they stand at that particular juncture (which is why micro-loans have become so successful). So, what will people need when the heat sets in? That'll be where the money's at.