My favourite story from economics class is the Wizard of Oz. Believe it or not, this book was actually a story about the great depression. Go ahead, Google it and come back here when you’re done. Rather than bore you with the details, I’d like to quickly draw your attention to the … [Read more...]
Using 3-part Dupont Analysis to Understand an Investment Opportunity
Filed Under: Dupont Analysis by
Analysts tend to focus in on how it is that a company’s returns directly relate to their personal returns by measuring the company’s ability to create a Return on Equity capital. This ROE metric has become famous as a basic benchmark for measuring the company’s ability to create … [Read more...]
Equity Dilution’s Impact on Value
Filed Under: Value Investing by
Keeping in mind the theme of value investing, I’d like to dedicate the next two posts to the discussion of equity dilution, and how its impacts can be worked into a value-based portfolio. For our purposes, equity dilution is going to refer to situations in which the values of an … [Read more...]
When to Co-Sign a Loan
Filed Under: Personal Finance by
One of the most frustrating aspects of being denied for a loan is that the application itself will decrease the borrower’s credit score, even though no actual debt transaction will actually take place. Because of this catch-22 situation, many individuals become particularly averse to … [Read more...]
Save Big Money by Shopping for Hot Deals Online
Filed Under: Personal Finance by
For the last several years I have shopped exclusively online for everything except food. I do this for two reasons number one being convenience and number two the huge cost savings I get. For those familiar with Bing Cash Back you know how great this program is but it's coming to a … [Read more...]
How to Calculate a Company’s Cash Conversion Cycle
Filed Under: Cash Conversion by
The fundamental quality of an investment opportunity is a function of that particular company’s ability to convert inventory into cash more efficiently than its competitors. This capacity for generating cash from sales represents a factor known as the Cash Conversion Cycle of the … [Read more...]
Averaging Down Without the Risk
Filed Under: Investing Strategies by
Volatility went through the roof again this week, and to be honest, I can’t even keep track of it any more. Between the political deck-shuffling in Italy and Greece delaying any semblance of sanity in the debt markets, and a sudden re-emergence of conflict in the middle-east stirring … [Read more...]
Stop Payments, Stop ETF, and Trace Check
Filed Under: Personal Finance by
Working for a financial institution, I’ve been able to see the benefits of online banking from a first-hand perspective. By cutting the costs associated with retail transactions in more than half, online banking provides some amazing opportunities for expanding the kinds of services … [Read more...]
How a Gold Exit Might Impact Your Bonds and Guaranteed Savings Portfolio
Filed Under: Personal Finance by
Your bond portfolio is your back-bone. It supports both the fixed-income and growth aspects of your portfolio by virtue of its stability, predictability, and cash-producing nature. No matter what, you know what kind of returns you’ll be getting from this portfolio, provided that there … [Read more...]
How to Manage TDSR and GDSR
Filed Under: Personal Finance by
Having gone through the last two articles to understand what TDSR and GDSR are, we are now in a position to dig into exactly how it is that lenders look at these two metrics, and some simple strategies that borrowers can use to improve their applications through these venues. When … [Read more...]
Context of a Mutual Fund – Vanguard Specialized Energy Fund (VGENX)
Filed Under: Fund Analysis by
Last week we examined a set of mutual funds that delivered stability and safety for an investor looking to pursue a somewhat more aggressive inflation-hedged bond portfolio. In order to both provide some contrast, as well as to examine the lucrative oil markets of the last ten … [Read more...]
What is Systemic Risk and Unsystemic Risk
Filed Under: Risk Analysis by
There is a lot of talk in the investment industry about how investors need to be aware of the systemic risk that they are taking into their portfolios, and take measures to reduce the amount of unsystemic risk they are exposed to overall. That being said, to the average investor, this … [Read more...]
Being Paid to Receive a Dividend, Covered Call
Filed Under: Investing Strategies by
This post is going to describe for you one of my favourite equity positions, the covered call. A well executed covered call position can be a cash-flow generating machine that increases the yield of a position by a complete handful of percentage points. Here’s how it works. When an … [Read more...]
How does the Spanish Debt Crisis Impact a Personal Investment Portfolio?
Filed Under: Personal Finance by
Currently, it has been forecasted that there is anywhere between a 60-80% Debt-to-GDP ratio in Spain. This means that sixty cents on every dollar of income in the country is tied to government bonds. That being said, this ratio is 20% less than that of Germany, France, or the USA, … [Read more...]
Portfolio Balancing Part 1 – What’s in Your Portfolio?
Filed Under: Portfolio Balancing by
There are many essential factors to generating returns in your personal investments portfolio. Over the course of this periodical, we’ll be describing how you can learn simple strategies for getting the best results through all of them. This week will have a three-part series that … [Read more...]
What is the Total Debt Service Ratio (TDSR)?
Filed Under: Personal Finance by
Second to a credit rating, the Total Debt Service Ratio (TDSR) is an important metric that lenders use to evaluate a borrower’s ability to take on additional debt. While a credit score itself will provide a picture of a borrower’s tendency to pay off loans based on past history, the … [Read more...]
How Zynga Generates Revenues
Filed Under: Business Value by
The last company I want to discuss in this series is the one with the most direct-to-consumer model of business. Zynga’s business model specifically surrounds directly engaging consumers with their line of social gaming products, but then creates income for investors through both a … [Read more...]
Credit Score Factors: Access to Credit
Filed Under: Personal Finance by
One of the most significant aspects of a credit application comes down to a question of whether or not the applicant already has access to the funds necessary to pay off the loan itself. A borrower that already has $100,000 available in their accounts is much better able to pay off a … [Read more...]
An Alternative to Options Strangles
Filed Under: Investing Strategies by
In the last post I outlined all the theoretical benefits of a position known as an ‘Options Strangle’. Don’t get me wrong, this is an excellent position to enter, but only under very specific circumstances. From the perspective of costs and rewards, it’s extremely effective in the way … [Read more...]
Corporate Bonds and High Yield Bonds
Filed Under: Investing Trends by
The next major investment trend that I want to point out surrounds debt, but in a different way than previously discussed. Granted, most of us don’t even want to think about debt after such a terrible decade for mortgages and credit cards, but it is important to remember the … [Read more...]
