The week starts off with an ominous article in the Wall Street Journal. Margin debt, or loans investors have taken out with their investments as collateral has hit an all time high. Higher than just before the 2000 bursting of the tech bubble, higher than just before the 2007 financial crisis.

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I really enjoyed the latest Talks at Google, featuring Andrew Lo. His presentation gives some great examples, and warnings, to investors:
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This week’s Chart of the Week comes from the most recent ‘Guide to the Markets’ put out by the wealth management folks at JP Morgan:

emerging_markets_vs_S&P_500How much longer can the trend last? Here’s some thoughts: [click to continue…]

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Investors have to interpret a lot of numbers, and make sense of a lot of forecasts in order to come to well educated investment decisions. But many of us went through the math class that taught us how to do this asking the teacher, “When are we ever going to use this?” and spacing out.

Jordan Ellenberg does an excellent job giving you a crash course in some basic math principles that have great benefits for investing.

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Pioneer Natural Resources (Ticker: PXD) shocked oil investors when it released their second quarter earnings last week. Shares of the shale driller went from $163 a share to under $130,and other s hale oil names fell as much as 10%.

The company reported $233 million in net income, a 4% rise in production and lower operating costs. So why did Wall Street sell off the sector? They saw this graph:

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What are CEOs saying to their shareholders as the first half of 2017 is in the books? Here are some excerpts from industry leaders like 3M, Facebook, Boeing and more.

 

Some common themes this week: [click to continue…]

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What does it take to reach a retirement account of $1 million? Here we take a look at how much you would have to save each month, depending on your age, to reach the $1 million milestone. [click to continue…]

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This week marks the anniversary of, at the time, the largest bankruptcy in American history and the conclusion of the largest case of accounting fraud in history. *

WorldCom declared bankruptcy July 21st, 2002 with $107 billion in assets.

How did this fraud develop? How was the WorldCom scandal discovered? How did WorldCom investors fare? [click to continue…]

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I don’t think there is any better teacher than history. So when you can get one of the classics for less than $3 used on Amazon, I don’t hesitate.

‘Bull! A History of the Boom and Bust’  by Maggie Mahar covers the beginning of the bull market in 1982 through the tech bubble bust and beginning of the recovery through 2004… [click to continue…]

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Over time, the largest share of the expenses you pay while investing will be a result of paying ETF or mutual fund expense ratio fees.

How do you find out how much your funds are charging you? How much will those fees affect your savings over the course of your investing life? We take a look… [click to continue…]

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Emerging market stocks have had a rough decade. 3 year annual returns are flat and even long term 10 year annual returns are barely over 1.5%. But there is new life appearing in the emerging markets. This year the FTSE Emerging Market Index is up 18%, breaking a long term downtrend:

Emerging Market ETFs

Are emerging markets turning the corner?

What’s the best way to invest in emerging markets? We take a look at a few options:

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Here are some stories that caught my eye this week: [click to continue…]

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This Week in Earnings Transcripts

 We are in the middle of earnings season. What are corporate executives seeing in the world economy? Take a look:

 

Lots of bullish words on Europe:

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Today marks a notorious day in stock market history. On this day 1932 the Dow Jones Industrial Average closed at 41.22.

 

What’s so special about that? [click to continue…]

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Another quarter has come and gone on Wall Street.  That means it is time to run our Ben Graham Value Screens again and see what companies have made the cut this quarter! [click to continue…]

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Continuing an annual tradition here on Begin To Invest, I added Buffett’s 2016 letter to the compilation of quotes from each year of his letters.

My selection includes some words of wisdom, stories of success and even a joke or two. In the end just these selected quotes make up over 5000 words!  It is amazing to watch history unfold from year to year and just think of what he has seen over the last 50 years….wars, inflation, stock market crashes etc. And yet, his first letter in 1977 could easily be mistaken for something you heard him say on the TV today. [click to continue…]

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Analyze InventoryThe basic operation of a business is centered around 2 steps:

  • Build a Product
  • Sell that product

 

And I would argue that step #2 is the most important. Of course quality of your product is important, but if your product isn’t selling – the business is not making money. Period.

 

Today we are going to look at a few ways to analyze the inventory on a company’s balance sheet to help us measure how well the company is doing selling its product.

 

Inventory is usually the largest current asset on a company’s balance sheet, and is therefore the company’s primary use of cash. We have all seen the new companies on Shark Tank who desperately need money for inventory (Or who have used up all their capital buying inventory). So learning a few basics on what a company’s inventory is telling you is very important.

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It’s a new year, and a new quarter! That means it is time to run our Ben Graham Value Screens again and see what companies have made the cut. [click to continue…]

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Welcome 2017! A new year, which means among many other things, a new year to invest in your IRA, ROTH IRA and/or 401(k). Here are the limits for contributions to IRAs, ROTH IRAs and 401(k)s, and how much you need to be saving each month or each bi-weekly paycheck to reach those limits:

2017-ira_401k-contribution-limits

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Confused? (It’s the IRS tax laws – of course you are!) Here it is in text and some of the fine print: [click to continue…]

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Analyze A Common Size Balance Sheet, Income Statement and Other Financial Statements – Common Size Analysis  (Now Updated) thumbnail

What is the Difference Between a Common Size Balance Sheet and a Regular Balance Sheet?

 

Common Size Analysis of Financial Statements involves looking at the numbers on the financial statement as a percentage of a total rather than their absolute value. Typically investors will look at a company’s common size balance sheet and common size income statement.

This is helpful when not only looking at a single company’s financial statements, but also comparing multiple business of different sizes at one time. Let’s take a look at an example of a normal balance sheet and a common size balance sheet for several companies:

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