Thursday, May 8, 2008

Stocks and Employees

Just a random thought popped in my mind on how investing in stocks makes you a better employee. The Jim Cramer ( ) style of Buy and Homework instead of Buy and Hold really drives the point through.

When you have money invested in a stock, you should be spending at least one hour per week doing home work on it. Which includes reading all articles published on that stock by management, analysts and media.

I think we should apply the same philosophy for the company that you are employed at. Spend at least an hour or so googling your company every week. Believe me, it will be worth while. Make sure you do it on your own time though.

So why does this make sense to me? Well, if you look at it, your money is invested in your employer in multiple forms. Your future pay checks, benefits, 401(K) etc. So when your livelihood is "invested" in your employer, it only makes sense you do your homework.

Look at your company in the same way you would look at any other that you own stock in.
- Who are the competitors?
- How is it doing?
- How is it doing against the competitors?
- What are the analysts saying?
- What is management saying?
- What is the media saying?

Here are a few additional questions to ask as an employee:
- Is your job aligned with the company strategy?
- Does your job have an impact on the stock price (or the bottom line for private firms)?
- Is management looking at your position/department as an important part of the company strategy?

Unless you are on top of your homework on this big position that you have in your life's portfolio, you leave yourself vulnerable to the bears!

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