Dividend Investing – How to Determine if Your Stock’s Dividend is Sustainable
A high dividend yield can be a sign of a strong, stable company and investment. However a large dividend yield may also be a signal of trouble and a hint that the company’s dividend may be unsustainable and cut in the near future.
Thankfully for investors, there are several quick checks you can do based on a company’s financial statements to see how sustainable that dividend really is. [click to continue…]
9 Signs of a Competitive Advantage (#9 is One of Buffett’s Favorites to Look For!)
Finding a company with a competitive advantage means finding an investment that will offer solid returns for decades to come. What identifies a company with a strong competitive advantage? Some results may surprise you. [click to continue…]
“Adaptive Markets: Financial Evolution At The Speed Of Thought” By Andrew Lo
I really enjoyed the latest Talks at Google, featuring Andrew Lo. His presentation gives some great examples, and warnings, to investors: [click to continue…]
Oil Investors Should Be Closely Watching This Trend
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:
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:
Are emerging markets turning the corner?
What’s the best way to invest in emerging markets? We take a look at a few options:
40 Years of Berkshire/Buffett Quotes – Now Updated to Include 2016’s Letter
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…]
How to Analyze a Company by Its Inventory
The 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.
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:
(Click to enlarge)
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…]
Analyze A Common Size Balance Sheet, Income Statement and Other Financial Statements – Common Size Analysis (Now Updated)
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:
Only 33% of Adults Are Financially Literate – Can You Pass the World Financial Literacy Test?
This was a study conducted by Standard and Poors about a year ago. A little dated, but our previous post (“86 Percent of Americans can not answer all of these questions – can you?“) from 2012 is a post that still brings in a lot of traffic years later. So I wanted to continue the financial literacy theme with a newer study and newer questions. This study questioned 150,000 people across 140 countries.
How many could get 3 of the following questions correct? World wide? Just 33% could answer. Americans were slightly better, but still a dismal 57% pass rate. Here are the questions, along with a detailed explanation of the answers. How well did you do? Miss a few? No worries, at the end we explain the answers in detail to ensure you understand the topic. [click to continue…]
Investing Based on a Company’s Net Income is Probably Not the Best Idea
It’s earnings season again, which means you are probably staring at a company or two in your portfolio that have seen their share price take a dive after reporting “disappointing” earnings.
You are not alone.
Here was the news the other morning after Warren Buffett’s Berkshire Hathaway reported earnings:
Sounds bad right? Profit (Net Income) is down by a sizeable margin year over year for Berkshire.
Does this mean it is time to say goodbye to the all-star investor?
From those headlines it may seem so. But there is a lot more to a company’s financials than that headline earnings number. (Read to the end and find out how Buffett really measures the success of his businesses.) [click to continue…]
State of Investors – Where are We Investing Our Money Today?
This was in Monday’s Wall Street Journal, it depicts the average investment asset allocation by generation:
Here we present the results from 2 different screens. Ben Graham’s “Defensive Investor” screen and “Enterprising Investor” screen. [click to continue…]
The Evolution of a Super-Investor — John Maynard Keynes
Keynes may be the most famous name in all of economics. The term “Keynesian Economics” still fills headlines today as global financiers look for ways to restart economic growth.
But what you may not have known is that the same Keynes that created Keynesian Economics, is also responsible for some of the earliest thoughts on value investing, diversification and behavioral finance. [click to continue…]
John Oliver on Retirement Plans, 401(k)s, and your investment advisor
John Oliver hits it out of the park with his segment the other night on retirement plans. Specifically he covers the effect of high fees, conflict of interests with your financial advisor and even gives some pretty good tips to get you on the right track. Check it out: