This is the second of a series of posts dedicated to properly researching stocks. In my previous post, I examined how to calculate a company’s free cash flow. Today, I’m going to show you how to determine if that cash flow will be put to good use. The company you’re researching can be profitable, efficient and financially sound, however, if [...]
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Successful investing isn’t easy. In addition to having a basic level of financial competency, successful investors must also exhibit a high degree of discipline and emotional control. Without all three of these characteristics an investor’s returns are likely to disappoint. After all, one can be as financially astute as Warren Buffett or George Soros; however, [...] Today is the first of a series of posts dedicated to properly researching stocks. As you’re probably aware, it’s always important to do proper research on a company before purchasing shares of its stock. Buying a stock without doing your homework is akin to jumping into the cockpit of a plane without proper training. In either [...] I’m in the process of re-reading The Intelligent Investor and found some words of wisdom from Ben Graham to young investors. In his chapter entitled, “The Defensive Investor and Common Stocks” Graham states… Let us not ignore human nature at this point. Finance has a fascination for many bright young people with limited means. They would [...] The markets have been in a sustained rally since hitting the March lows. Since that time, the S&P 500 has climbed more than 50% from the bottom. While we’ve seen some noticeable improvement in the economy since than, there are still many ominous signs that make me weary. Firstly, second quarter earnings were largely viewed as [...] In a recent interview Warren Buffett was asked for his “top three pieces of advice for average Americans who want to grow their savings and keep their money safe.” Here’s what he said… If it seems too good to be true… it probably is |
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Don't Ignore Risk
I’m always reading articles and listening to “financial gurus” who tell individuals ***with extra money*** not to pay down low interest rate debt. Instead, the expert advises paying the minimum on mortgages and student loans so the difference can be invested in stocks. In theory, this will give the individual greater returns, as the stock markets historical average of 10% [...]