One of the most wildly successful asset-based investments for the last few years has been gold. While it’s hard to describe what it is that actually creates value for gold investors, the returns speak for themselves. Investors speak with their dollars, and the price gold has shot … [Read more...]
Using 5-part Dupont Analysis to Understand an Investment Opportunity
Filed Under: Dupont Analysis by
Using the Dupont approach to analyzing a company’s Return on Equity provides an investor with valuable information about where it is that their return is coming from. By breaking down RoE into as many as five component aspects, we can see how it is that changes in each individual … [Read more...]
How Search Engines Make Money & How You Can Too
Filed Under: Business Value by
Google has revolutionized the stock market as much as it has the internet. Starting with its application of its legendary real-time auction model to its initial public offering, Google has continued to exceed expectations for its bottom line as an investment opportunity. From it, … [Read more...]
Avoid Facebook if You’re Going Through a Divorce!
Filed Under: Personal Finance by
I just read a very interesting article about social media that got me thinking. If you are going through a divorce avoid social media contact at all costs or it will end up biting you in the wallet! Social media websites such as Facebook, Myspace and Twitter are the gold at the end … [Read more...]
Understanding Market Neutral Positions
Filed Under: Market Positions by
Volatility can be a tough pill to swallow, especially when it can have such a large daily impact on your personal savings portfolio. However managing volatility as a personal investor can sometimes be overwhelming, in that there are so many confusing strategies available to choose … [Read more...]
Mitigating Equity Dilution as a Value Investor
Filed Under: Value Investing by
In the last article, I went through a couple of scenarios that could result in an investor’s position being diluted out by further equity issuances by the company itself. While these situations don’t really have a major impact on the value of the investment itself (increasing the … [Read more...]
The Opposing Sides of Structured Settlement Annuity Payments
Filed Under: Personal Finance by
In simple terms, a structured settlement is an annuity awarded to a plaintiff due to a personal injury lawsuit settlement. The goals of the buyer and the seller of structured settlement annuity payments are, for the most part, entirely opposed. But despite the contrast in the … [Read more...]
Using Diversification to Reduce Investment Portfolio Risk
Filed Under: Risk Analysis by
Having looked at how diversification can be used to reduce our exposure to unsystemic risks in an investment portfolio, we can now start looking at the specifics of how it is that diversification can improve our ability to generate returns with as little risk exposure as possible. … [Read more...]
Inside a Mutual Fund Evaluating BPRAX
Filed Under: Fund Analysis by
Now that we understand the basics of this fund which I discussed here (BPRAX), let’s take a moment to understand why it is that we would want to consider it as an investment opportunity. I’m going to discuss this fund under the following assumptions: The near-term inflationary … [Read more...]
Portfolio Balancing Part 2 – Making The Best Use of Asset Classes
Filed Under: Portfolio Balancing by
In the first article, we discussed what the four main elements of your personal investment portfolio will generally consist of. With that understanding in mind, let’s continue on to discuss how each of these asset classes is practically applied towards building our financial … [Read more...]
Credit Score Factors: Payment History
Filed Under: Personal Finance by
It might seem counter-intuitive, but the most important investment decisions that a personal investor will ever make tend to revolve more around debt than they do actual securities. This is because of the way in which our debt and credit capacity makes up for such much of our total … [Read more...]
Understanding Economies of Scale: Brokerage Commissions
Filed Under: Economics of Scale by
The other day I received a question at work about how it is that a mutual fund or ETF can provide an investor with scale in an investing portfolio. The asking party was mainly curious about how it is that the diversification benefits of a fund can outweigh the liquidity that an … [Read more...]
Short Put Market Neutral Positioning
Filed Under: Market Positions by
The final market neutral position that I’d like to examine in this week’s series is called a short put strategy. It is similar to the previously discussed long call position in that they are opposite positions to the same effect. However, the main difference between the two positions … [Read more...]
Who Regulates Financial Advisory in the USA?
Filed Under: Personal Finance by
Financial planners and advisors seem to spring up frequently these days, all claiming to be the best qualified to handle our personal savings and investments. While many of these professionals do indeed have the skills necessary to guide us towards our financial goals, it can still be … [Read more...]
Applying Value Analysis to Income and Cash Flow
Filed Under: Value Investing by
The first things you should ever look at when analyzing a company is its top and bottom lines. How much money is this company making, and how much is it keeping? From there, you can work your way throughout the gritty details about where it is all the money is going, and whether or … [Read more...]
How to Interpret a Company’s Cash Conversion Cycle
Filed Under: Cash Conversion by
Having looked at how we can standardize and calculate a company’s ability to convert its inventory into cash through the cash conversion cycle metric, we can now go into detail about the nuances of interpreting how it is that we would use this metric to gain insights into the … [Read more...]
Global Industry Classification Standard to Classify Different Types of Unsystemic Risk
Filed Under: Risk Analysis by
One of the most robust methods of classifying the different kinds of unsystemic risks within an investment portfolio is to have a robust system of determining exactly what kind of business the companies being invested in pursue, and then creating weighted positions across the various … [Read more...]
The Spanish Debt Crisis: How Bad is it?
Filed Under: Personal Finance by
Over April, the Spanish Debt Crisis began to take centre stage as investors turned their attention away from Greece. Despite a brief rally in the market, it seems as though European debt is again going to exert its influence on North American Stock Exchanges for the near future. But … [Read more...]
Earning an Income in Selling off a Position
Filed Under: Investing Strategies by
In the last post I described how you can earn an income by using cash covered puts to gently introduce yourself to an equity position. While it works as a fantastic strategy to graduate a security into your portfolio, and thus reduce the psychological gravity associated with suddenly … [Read more...]
Credit Score Factors: Age of File & Credit Seeking Tendencies
Filed Under: Personal Finance by
Credit building requires, without a doubt, a long term plan and determination in order to be effective over the long term. However, many people don’t realize that the long-term nature of credit building is not just an exercise in self-restraint, but a factor that is considered in … [Read more...]
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