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If this is your first time reading my (proficient) work, then when I purchase Yahoo and purchase Procter & Gamble, you may need to check my previous posts so we are all on the same page.

I want to solve the problem by looking at my current investment. In the past few weeks, I have started investing in fakes on Wall Street survivors, but the reality is that. I only invested a few thousand dollars and tried to make the decision I would make if it was the real money I was dealing with. So far I have held shares in Yahoo and Procter & Gamble.

My Yahoo (YHOO) stock continued to fall this week, and since I bought it two weeks ago (down 4.1% per share), I have lost about $1.20 per share. Yahoo’s biggest news this week was the acquisition of e-commerce startup Lexity. The start-up company helped develop the small online business through an application platform, which marked the 19th acquisition of CEO Marissa Mayer last year, and another introduction of talent from the mobile industry. Obviously, this shift in the company is a strategy that focuses on mobility and is therefore my favorite strategy. Mobile currency is the future. No, now. Yahoo plans to become the leader of this list through these initiatives.

On the other hand, Procter & Gamble (PG) has been listed. Just this morning, before the stock market opened, P & G announced the latest quarterly earnings. This is the first time since Procter & Gamble’s reappointment of their senior CEO, Lafley, that they have many opinions on these results.

Compared with estimates made by major economists before the company released the report, profit figures are often judged. In this case, economists estimate that Procter & Gamble’s earnings per share is 77 cents. (Earnings per share is the company’s profit divided by the number of issued shares.) P & G defeated these estimates and declared earnings per share of 79 cents.

A difference of 2 cents, who cares?

Wrong. Multiplied by 2.74 billion shares of Procter & Gamble, suddenly those 2 cents could no longer be seen. So, in the exciting news this morning, Procter & Gamble’s share price has risen 1.7% so far. I hope this number will continue to rise.

However, considering Yahoo, my overall portfolio is still red. But we are here only for a few weeks. Patience, patience!

My third pick: AFL

No, I don’t plan to invest in the Australian Football League. Although, if I am, I will put money on this person.

For my third stock option, I decided to cooperate with the tertiary industry: the insurance industry. I am taking the next page from “Diversity” and dividing my current small portfolio into different departments. My first two choices are stocks in the technology and consumer staple industries. This time, I am working with the financial sector. For my third stock, I chose Fortune 500 company: Aflac (AFL).

No, I didn’t choose it because of the awesome Aflac Duck (OK, maybe just a little). I chose it because:

More than 50 million people worldwide have chosen Aflac Insurance. This company has a history of more than half a century, and its longstanding reputation makes it a powerful choice for insurance coverage. Avraq has what Warren Buffett calls an economic moat. (As you can see from my post, I may have the slightest crush on other people’s WB.) The economic moat is a feature of a company – whether it’s a better technology, a reputable brand name, nothing Picky sales team – as protection from its competitors. Only the brand name “Aflac” is recognized globally and is Aflac’s economic moat.

Its financial status looks good compared to other industries and sectors. One of the best ways to judge stock performance is to compare it with industry (insurance) and industry (finance). If it is better than the industry average, then it may be better than most other competitors. Let’s take a look at some key statistics of AFL stocks compared with the insurance industry and the overall financial industry.

The price-earnings ratio is basically how much investors are willing to pay for the company’s earnings (or profits). It is calculated by dividing the current stock price by the earnings per share (which we discussed earlier).

So let’s take Procter & Gamble as an example. This quarter, they earned 79 cents per share. Its annual earnings per share (the last 4 quarters) is currently 4.46. But their stock is trading at $81. This means that their price-to-earnings ratio is just over 18, which means that investors are willing to earn around $18 for every dollar earned by the company. (If you are still confused, this video will convincingly explain the P/E ratio.)

But wait? Why do people pay $18 for something worth $1? ! ? I mean, you buy a stock because you believe it will make money, so why pay 18 times?

Then, the key word is “will make money.” The extra money you pay is to pay for the company’s future profits.

Think like this. If you want to buy a bike, if you want to buy a better bike, then you will spend more money on buying a bike. The same is true for stocks. You will spend more money on a better quality company and make more money over time. P/E attempts to capture this quality in a number.

Our job as an investor is to determine if the price tag is reasonable, which is the same as ensuring the quality of the more expensive bike. For this reason, we usually compare the price-earnings ratio with other companies in the industry.

Here we can see that Aflac’s P/E ratio is 9.65, which is slightly higher than the industry average price-to-earnings ratio. This does not worry me because Aflac is a leader in its industry. Paying a little more stock is OK, as long as you can prove the price tag with the commercial quality of your purchase.

As my main character Warren Buffett said: “Price is what you pay for, and value is what you get.”

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