Hee hee…I might be the only freak in the world who gets that joke. Anyway, today was election day, and I did my civic duty by voting against the Republicans and Democrats wherever possible except for the US Senator election. Kay Bailey Hutchison helped repeal Wright, so I couldn’t vote against her, but she also insulted Southwest’s coffee in a press conference afterward, so I couldn’t vote for her, either. She’ll get elected either way. I’m still pulling for Kinky, though…

I have a new project and possible use for my MBA – making money in the stock market. I picked up some books at Half Price Books, and I’ve been reading reports by Warren Buffett on his investing philosophy for Berkshire Hathaway. From what I’ve seen so far, the stock market is largely illogical, despite what I learned in my finance class. We learned tidy formulas for valuing a company based on the present value of projected future cash flows, discounted by the risk premium, etc. But it seems to me that a stock’s price is largely determined by the market’s consensus about the stock’s future movement rather than the actual value of the company, especially if the company doesn’t pay signficant dividends on earnings. The price goes up if the analysts and investors think the price will rise and down if they think the price will fall. How circular is that?!? In addition, a stock’s price is significantly affected by how closely the company hits the analysts’ and its own earnings forecasts, more so than by the actual amount of profit or loss that help determine the company’s health. Even more strangely, Southwest’s stock price often DROPS when we report our quarterly earnings, which have been positive every quarter since the early 1990s, even if we BEAT the target! Despite the insanity of the system, there is money to be made, and I intend to figure out how to wisely carve off a slice for us. I know a couple of people who are getting into day trading with some success, but that sounds a little risky for me. I want something a little more stable and logical. I’ll see what my books recommend…