Cora and I began a summer investment project last week that concerns TV (oh boy!) and commercials (oh no!). We won't repeat the instructions, because we laid them out in last week's article. By now, your children (or you) finished a list or two that tallies company names, products or services, directives, and your feelings about the commercials. Now, for the purpose behind this madness?

First, this game centers on new investment possibilities. You may notice that your list - if you kept one - is far different than your children's lists. The company wants to target their ideal audience in these ads, so the programs you watch carry different products and services than your children's choices. Additionally, the lists will all reflect the season, because you won't find ads about frozen pipes or fur coats in summer. If you continue this exercise throughout summer, you'll begin to see commercials for "back to school" about August if not sooner.

You might notice another similarity among your lists under "directive," where the message from the commercial is "BUY." Even if it seems the commercial simply imparts directions to a theme park, the point is to get there, get there quick, buy tickets for all the rides, and don't forget to eat at all the very expensive restaurants after you wait in long lines. It's remarkable how ad agencies manage to create messages that appear innocent and benevolent when their clients really want to get their hands in your wallet. If your list includes a "sell" directive, they're still after a profit. Here's a list of a few other commercial "types" that may appear on your lists:

Donation: If donation commercials appear on your lists, scratch them, because they probably originate from nonprofit organizations. Most nonprofit companies aren't publicly traded, so your investigation into these organizations for investment possibilities will go nowhere fast.
Public Relation: these commercials are important, especially if they originate from profit-based companies. These ads boost the company's image in the community. These communities range from local to international.
Identity: These commercials are different from public relation ads because the company simply wants you to remember their name, a slogan, and their product or service. Sometimes, if the name is well-known, they may omit the product or service and, if you spent the last decade or so on Mars, you guess what the company sells.
Local: Unless these companies sell equities, you might scratch these, also. However, if you want to investigate them as an investment possibility, feel free. If they aren't publicly traded, though, you'll find their financials aren't public either. You need financials for research.

The next step follows logically, because you and your children will pick a company from your list to investigate their financials. There are several ways to go about this step.

1. Go to BUYandHOLD and plug the company name into the symbol lookup. If the company is listed, a list will pop up that links to their "company profile." A brief description about the company appears along with a number of items that may appear totally foreign to you. First, read the profile to learn more about your company. You might be surprised to find the company sells or does more than their commercial intimated. If you don't like what you see, pick another company from your list. If you're investment-savvy, you can examine the other information on this page. If everything seems foreign to you, don't worry - we'll break it all down for discussion over the next few weeks.

2. If your company isn't listed at BUYandHOLD, or if you want to learn more about your choice, find the company website. The best way to find a company's investment web page is to go to a search engine and plug the company name plus the word "investment" into the search box. If you hit a blank on that trick, just find the "official" company site and look for a link that takes you to "about our company," "investment information," or something similar. If this information is difficult to find, then bypass this choice. Either they don't trade or they consider investment information unimportant.

Our first question about our company choice concerned the amount spent on television advertising (or any other advertising), and whether these promotions benefit the company's bottom line. However, this information is difficult to discern if we rely on the choices above, because budget information is contained in annual reports. Some company web sites may contain annual reports as PDF files (if you don't have an PDF reader on your computer, you can download a "safe" one free from Adobe).

Another way to retrieve an annual report is to write or call the company for a print version. Whether you download the report from the web or receive it by mail, this information is essential for your research. However, you may eventually realize that you have a huge pile of paper in the house?If you lose interest in the company, your kids can use the paper for collages or you can trash it (please recycle if possible?). Another alternative is to file it away and wait for the next year's report so you can compare budgets. Word of warning: save only the reports that seem promising. Don't save them because they're pretty (like I do), because the next thing you know you have nine cats, the kids are gone, and you're fodder for a newspaper story about "that strange neighbor."

If we're sensible about this, we learn that company budgets are just like our home budgets, only with a few extra digits and a lot more categories. Next week we'll look at some of these budget results on the BUYandHOLD chart pages.

Until Then,
Linda Goin