Articles Index
Business-Like Investing
Investing in equities is, quite literally, the act of buying businesses. In this article, we are going to take real life business lessons and apply them to your investment portfolio. You’ll examine common mistakes entrepreneurs make and ways to avoid them in your investments.
5 Secrets to Making Money During the Storm on Wall Street
The key to successful investing is consistency. If you are buying shares of good businesses, that generate real profits, attractive returns on equity, have low to moderate debt to equity ratios, improving gross profit margins, a shareholder-friendly management, and at least some franchise value, over long periods of time, history has shown for generations that you can get very rich, building substantial wealth for you and your family.
The Key to Finding Stocks that Will Make You Rich? Focus on Return on Equity
Over long periods of time, the performance of a stock most closely correlates with the return earned on shareholders’ equity. That's why investors that want to do well should focus on return on equity or ROE combined with a reasonable price.
Buy and Holding Investing Strategy
Buy and hold investing can make a lot of sense because it allows an investor to make money from the underlying business, not just fluctuations in the stock market. Some of the world's greatest investors have made their fortune by buy and hold investing.
Defensive Investing
In light of the recent volatility on Wall Street, many investors seem concerned about their portfolios. Discover ways to build a defensive portfolio for volatile markets in this investing for beginners article.
Getting Rich by Investing in an Excellent Business
At the annual meeting in 1996, Warren Buffett and Charlie Munger commented that, “If you find three wonderful businesses in your life, you’ll get very rich.” At the meeting one year later, he said, “The single biggest recurring mistake I’ve made has been my reluctance to pay up for outstanding businesses.” As a new investor, you may here this and wonder, “Yes, Joshua, but what is it that actually makes a company an excellent business?”
The Concept of Cash Carry
Imagine that you know you are going to acquire shares of a company such as U.S. Bancorp or Wells Fargo (both of which I own at the time of this article.) You are due for some major cash windfall such as a bonus, inheritance, or proceeds from the sale of real estate. Find out how cash carry can help you buy your stock position.
Making Money in Bad Companies
Sometimes, you can make more money by buying the least attractive stock in a particular industry if you believe the sector is due for a turnaround. Although it is counterintuitive, a little bit of simple math can show why it makes perfect sense and can leave the shrewd analyst with a much fatter pocketbook. These types of operations are for investors that have already built their complete portfolio and are on financially sound footing.
Past Performance is No Guarantee of Future Results
Almost all investment literature warns you that past performance is no guarantee of future results. Many investors would do well to heed this advice instead of chasing hot sectors and stocks.
7 Signs of a Shareholder Friendly Management
Good corporate governance is important for your portfolio. When you are in business with people who are interesting in making sure you, the shareholder, get a fair shake, you are likely to have better results. Here are seven things you can look for in an owner-oriented enterprise.
Investing in Your Employer’s Stock
Should you invest in your company's or employer's common stock or is it a bad idea to risk your retirement? Discover possible solutions and answers in this investment article.
Spin-Offs vs. Sale of Subsidiaries
Are tax-free spin-offs better for your portfolio that the sale of a subsidiary or subsidiaries for cash? What are the tax effects of spin-offs? Find out the answers in this investing article.
Rationality
Rationality is the silver bullet of intelligent investing. It allows you to make cold, logical, and unemotional decisions that will help your investment portfolio and grow your bottom line.
7 Keys to Successful Investing
Discover the 7 keys to successful investing. These basic principles can help you generate superior results for your portfolio.
Risk Arbitrage - Profiting from Mergers, Acquisitions and Liquidations
Arbitrage (sometimes called “risk arbitrage” or “merger arbitrage”) is a special type of investment operation that is meant to generate profit with little or no risk. This article discusses Benjamin Graham's formula for evaluating arbitrage operations as well as how arbitrage opportunities come into being on the security markets.