WHAT IS A STOCK AND WHAT IS A COMPANY?

It’s hard to answer this question without addressing the issue of “what is a company?” first.  So, let’s start there.

Let’s say you had a great idea and decided to try and profit from it.  You could set up a separate activity, a company, let's say, to do just that.  The company would be formed with a goal in mind, an objective of some type, with the obvious intent of trying to make a profit for the owner.  Well, there are three basic ways that one can establish a company: (i) continue to be or form a sole proprietorship, (ii) create a partnership or (iii) establish a corporation.  The latter two exist to raise capital?funds to exploit your idea so you and your investors can profit?there's an additional valid reason to form a corporation.

The Stock Selection Section 4 

What we’re going to cover

In this section, we’re going to look at Section 4 of the Stock Selection Guide.  Section 4 is pretty much the target—figuring out if the stock is fairly priced. All the work in sections 1 through 3 converge into part 4 of the Guide.  We want to make sure that the company is likely to double in value in the next five years.  This criterion usually forms part of a screen that most members of BetterInvesting apply when deciding if they want to purchase a company at the current price.

 Appendix 1

On-line Resources

http://www.better-investing.org/                              The Better Investing (NAIC) Web Site

http://www.better-investing.org/                                 The Better Investing (NAIC) Web Site

http://www.investorwords.com/                                 A glossary of financial terms

http://www.valueline.com                                        The Value Line home page

http://www.manifestinvesting.com/                            Site that applies BetterInvesting principles in a unique and effective manner

http://www.buyandhold.com/                                    Site for low cost investing; not Buy and Hold has been purchased

http://www.zecco.com/                                            A deep discount broker, actually $0 commissions