Practical Personal Investing 2 Online access is essential. While this course is a continuation of those offered in the winter and fall of 2014, it is open to anyone with an interest in investing in stock markets. Attendance at the previous courses is not necessary. Moderator: Greg Shtock Over 20 years ago, while working full time as an engineer, Greg Shtock undertook the task of managing his own finances, studying markets and investment methods. He investigated which strategies work and which don’t, and, most importantly, why. Today, he shares his experience and passion with others by teaching how markets work. Practical Personal Investing 2, Session 1, Fall This course will give you an unbiased, non-promotional view of financial markets and investments. You will learn how to analyze, find, and manage investments using fundamental and technical analysis. You will discover the difference between value and growth stocks, and the meaning of oversold and overbought conditions. You will use free websites, different criteria and indicators to analyze stocks. You will gain the required knowledge to make better investment decisions and have the opportunity to ask questions and participate in discussions.

Practical Personal Investing 2, Session 1, Fall To download this presentation go to Investors Support Network: Support Network PPI 2 – Course Outline  Stocks value based on their EPS and P/E multiples  Value vs. Growth Stocks  GARP - 'Growth at a Reasonable Price  PEG Ratio  P/S – Price to sales ratio  REIT - Real Estate Investment Trust valuation using AFFO criteria  Dividend Yield – Payout Ratio  Price to Book and Price to Cash Flow Ratio  Investment Methodology – CAN SLIM, by William O’Neil  Technical Analysis Demystified  Trend, Chart Patterns, Candle Stick Charts  Relative Strength Index – RSI  Overbought / Oversold Conditions

Introduction Before we begin our presentation, let me show you some of the practical investment tools we will use. Do not worry if they appear to be somewhat complex. This course is designed for beginners and will be presented in simple language. Free tools: Yahoo Finance – News and fundamentals: Finviz.com – Stocks Screener, Futures, Forex : Stockcharts.com – Charts and technical analysis: FreeStockCharts.com : Practical Personal Investing 2, Session 1, Fall 20153

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7 Finding great companies is only half the equation in picking stocks. Figuring out an appropriate price to pay is just as important to your investment success. A great company might not be a great investment, if its stock is too expensive. Likewise, a company of mediocre quality could be a good investment, if bought cheaply enough. Either way, it's critical to be aware of the prices you are paying for your stock investments. Source: Video, Stocks Markets:

Practical Personal Investing 2, Session 1, Fall Price Apple IncAAPL116 Facebook, Inc.FB92 Twitter, Inctwtr26 Google Inc.googl654 Microsoft Corporationmsft43 Expensive or Cheap Stocks?

Practical Personal Investing 2, Session 1, Fall  Let’s start with the basics.  Is a $10 stock of company A less expensive than a $20 stock of company B? The answer is not so obvious.  When you buy a company’s stock, you gain partial ownership of the company.  What would you look for when buying a business?  You would look at sales and revenue and many other factors. However, do higher sales guarantee a successful business?  What about expenses relative to sales?

Profitability is one of the most important factors in evaluating companies. In the financial world, company profitability is measured by earnings. Earnings typically refer to net income, after taxes and all expenses. So, is company A with its $2 million dollar earnings better than company B with only $1M earnings? Again, the answer is not so obvious. What if company A has four million outstanding shares? This means that its earnings per share are $0.50. If company B has only ½ million outstanding shares, the earnings per share would be $2.00. In this case, when you buy shares from company A, company B is actually more profitable ($2.00 vs. $0.50), even with less earnings. Practical Personal Investing 2, Session 1, Fall Definition of Earnings per share (EPS): A company's profit divided by its number of common outstanding shares.

Practical Personal Investing 2, Session 1, Fall  The next question you may ask is: How much are you ready to pay for a share in the company?  It depends on what you will get back for your investment. Company B’s stock would be worth more because it has an EPS of $2.00 vs. the EPS of $0.50 of company A.  In order to compare “apples to apples,” investors use the Price-to-Earnings Ratio.  Definition of Price-to-Earnings Ratio (P/E): The price per share is divided by the annual earnings per share.  In financial jargon, P/E is also called “the multiple”. Company ACompany B Price$10$20 Earnings$2M$1M Outstanding Shares4M0.5M EPS$0.50$2.00 PE Ratio2010 Conclusion: Based on the PE ratio, the $20 stock of company B is less expensive or has more value than the $10 stock of company A.

Practical Personal Investing 2, Session 1, Fall Concepts of Value vs. Growth Stocks Value investing is buying stocks at less than their intrinsic value. One of the characteristics of value stocks is Low PE ratio. Definition of 'Growth Stock‘: Shares in a company whose earnings are expected to grow at an above- average rate relative to the market. Source: Growth stocks, typically have High PE Ratio. PriceEPSPE Apple IncAAPL Facebook, Inc.FB Twitter, Inctwtr Google Inc.googl Microsoft Corporationmsft

Practical Personal Investing 2, Session 1, Fall Markets PE ratio: