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Stock investing Let's think a moment about the value of an investment. First we have to look at the ways an investment can bring us the desired return. There are two lways; cash flow and capital appreciation. One example of this is real estate. I can buy a house for investment. I can decide how I want the return from this investment -rent would give me cash flow and selling the home for more than I paid for it would give me capital appreciation. If I decide that renting takes too much time, effort and risk to the asset I may decide to just fix the house up and flip it - this is a pure capital appreciation investment. On the other hand if the market is soft for reselling. I may be stuck with holding and renting my property so at least I get a cash flow from my investment, Company stocks are the same as this - just replace dividends for rent. The formula to keep in mind here is the following R= [D1 + (P1-PO)YPO. In English this reads Return equals Dividend at end of period 1(D1) plus the difference between the price at period 1 minus original purchase price divided by the original purchase price. Choose the stock for a particular company and explain to me why you believe it is a good or bad investment using rationale from Chapter 8 reading

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