An Introduction to a Stock’s Annual Report
Comments OffMany investors know that they are supposed to request a company’s annual report to understand the business but they don’t really know what it is or why it is important. What is the annual report? The annual report is a document prepared by a company’s management to the shareholders explaining what happened in the [...]
To Improve Your Chances of Beating the Market – Analyze it as a Stock
Comments OffOne great and useful tip to help you beat the market is to value each major index as if it were an actual stock. For example, what is the price-to-earnings ratio? What is the return on equity, return on assets, and capitalization structure? What is the growth rate of earnings over the past decade? What [...]
Frictional Expenses: The Hidden Investment Tax
Few investors are aware of the tremendous damage so-called frictional expenses impose on investment performance. By merely reducing these expenses, you may be able to significantly increase your long-term rate of return by lowering your overall cost basis. Commissions and Fees The most frequent frictional expense is brokerage commissions and fees. Thankfully, with the advent [...]
Think of Your Stocks Like Real Estate
This past week, I was considering buying a home near my parents so that when I was back in area, I would have a place from which to work and live. With the real estate market falling to 2004 prices, on average, it seemed a good time to buy (value investing is not limited to [...]
Understanding Intrinsic Value and Why Different Businesses Deserve Different Valuations
Comments OffReaders of this site know that I’m an unabashed, dyed-in-the-wool value investor. Yet, a mistake many people tend to make is to associate this with only buying low price-to-earnings ratio stocks. While this approach has certainly generated above-average returns over long-periods of time (see Tweedy, Browne & Company’s publication What Has Worked in Investing), it [...]
