Stock Market Assignment

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Journal One - The Stock Market Game

First submission

Date 26/10/2009| Table 1|  |  |
Company| Shares bought| Share Price| Change|
3i Group| 2000| £2.95| £5,900.00|
BP| 2000| £5.65| £11,300.00|
Prudential| 4000| £6.33| £25,320.00|
Sainsbury’s| 2000| £3.39| £6,780.00|
 |  |  |  |
TOTAL|  |  | £49,300.00|
CASH HELD|  |  | £50,700.00|
 |  |  |  |
Original amount|  |  | £100,000.00|
Profit/Loss|  |  | 0|

I will undertake an analysis of 3i Group. I have already invested £5,900.00 and have bought 2000 shares at the share price of £3.39. I will be watching my shares closely so that I can make a choice to sell, buy or hold my shares

3i Group

Established in the 1945, is one of the UK's biggest investors in private companies, it says its strategy is to go for early stage growth companies rather than the financial wizardry favoured by by other ventured capitalists. It has been a big investor in technology companies in the past.

The reason why I chose this company is because I followed the advice given to me in lecture to not pick companies that I am familiar with.

This chart shows the behaviour of the share price over 6 months.

I will undertake an analysis of BP. I have already invested £11,300 at a share price of £5.65. The Beta for this company 0.89 which is less than 1. This means that the security will be less so I may not make a profit on my return so there is a bit of a risk.

BP

Oil giant BP moved into the bracket of oil companies in the late nineties, with the acquisition of US concerns Amoco and Atlantic Richfield. More geared to oil production and exploration than its main rivals. BP has moved into the former Soviet Union to secure future production as its current key asset in the North Sea and Alaska wind down.

The reason why I chose this company was because petrol prices have been going up, at one stage the price for a litre was less than £1. So I am taking a risk with this one but I am hoping it will turn out that I have made some profit with the choices I have made.

This chart shows the behaviour of the share price over 6 months

I will undertake an analysis of Sainsbury’s. I have already invested £6780.00 at a share price of £3.39. The Beta for this company is 0.5 again this is less than 1. The security risk is going to be high with this company. I will keep a close eye on the share price if it falls I may have to sell my shares at the right time so I do not make a loss.

Sainsbury’s J

Sainsbury’s UK supermarket group was originally founded in the Drury lane in London 1869. The group began life as a listed company in 1973 which at the time was UK largest ever flotation the group have moved into financial services

I chose to invest in this company because the public need to purchase food it is a need not a want. There are many competitors out there such as Tesco and Asda, which would have been an obvious choice for me, but again I thought I would take a risk and go for a company that I do not shop in. I logged on to www.digitallook.com and at the time Sainsbury’s was a top seller, because of this small bit of information I decided I was going to buy some shares from this company. I checked on another day and the shares had dropped, so I thought maybe Sainsbury’s is not the right company to choose. I chose it because it may be going up and down but may end up as a winner. Tesco, Asda and some other competitors were on watchdog about flat packed bikes; this program may affect their Christmas sales.

In this entry I will undertake an analysis of Prudential. I have already invested £25,320. This is the largest investment I have made but I believe it is the best one and I will make a return on my investment. The Beta for this company is 2.24 so this proves I will make a return on my investment nevertheless there will be more of a higher risk, that I am willing to take.
Prudential...
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