“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:
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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:

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Fund Spotlight Series – Emerging Market Funds

 

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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Weekend Reads – July 23rd 2017

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

What Stocks Would Ben Graham Buy Today? Q2 2017

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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…]

40 Years of Berkshire/Buffett Quotes – Now Updated to Include 2016’s Letter

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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…]

How to Analyze a Company by Its Inventory

 

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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What Stocks Would Ben Graham Buy Today? Q1 2017

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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…]

2017 IRA, ROTH IRA and 401(k) Contribution Limits

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:

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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…]

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:

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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:

 

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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:

 

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The title of the article was “The Biggest Mistake People Make – Decade by Decade

And if you can’t tell from the picture alone, Millennial’s (and every other generation’s) biggest mistake is playing it too safe – allocating 70% (!) of their money in cash. [click to continue…]

Want to Invest in the Stocks Ben Graham Would Buy Today? There’s a Fund for that! Q4 2016

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Our newest addition to our Fund Spotlight Series. Here we are building off of our Ben Graham Value Screen Series, and making those screens investable with just a click with the help of Motif Investing.

This is a collection of companies that most recently have passed Graham’s stringent value investing screen.

Of the whole investing universe, less than 25 companies make the list. What would Ben Graham buy today? this is probably a good start: [click to continue…]

Ben Graham Screens – Which Companies Pass the Test Today? – 4th Quarter 2016

Ben Graham Value Screens Image

 

This is a continuation of our “Ben Graham Value Screens” series, where we look at investment opportunities based on the criteria that Ben Graham used and that is outlined in his (excellent) biography, The Einstein of Money.

 

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

by Unknown photographer, bromide print, 1933

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:

 

 

 

 

 

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5 Facts About Health Savings Accounts


Want to learn more about Health Savings Accounts? Read on below: [click to continue…]

Ben Graham Value Screens – Which Companies Pass the Test Today? April 2016

 

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Looking for potential investments? With thousands of stocks to research, getting started can seem a bit overwhelming. Here are a couple screens (and the companies that made it through) using sets of criteria utilized by the “Dean of Wall Street” and “Godfather of Value Investing”, Ben Graham.

 

The significance of Ben Graham’s Wall Street career cannot be overstated. His investment partnership averaged 17% annual returns over its existence. He created and mentored some of the most successful investors ever to live and has been responsible for the education of more investors than almost anyone with his 2 best-selling investment books, The Intelligent Investor and Security Analysis. He had a very disciplined, rule-based approach to investing that focused on only one thing: A company’s intrinsic value.

 

The following comes from the book, “Einstein of Money”, a great biography of Ben Graham that is also focused on his investment work. Every other chapter breaks from the life story of Graham to detail a main concept in his investment philosophy. Whether it is his concept of Margin of Safety, Fundamental Analysis or advice on dealing with “Mr. Market”, the author does a great job mixing in the life of Benjamin Graham and the ideas behind his work. [click to continue…]

Today in Stock Market History – March 6th

This Day in History

March 6th, 1933 – The banking crisis that has plagued various states now effects the whole nation. At 1am, Monday March 6th, Franklin Denanor Roosevelt closes every bank in the nation in a shutdown that was planned to last 4 days, along with banning the export of gold and all foreign exchange transactions.  The next couple weeks would become many of FDR’s defining moments preventing the nation’s banking system collapse in the great depression. Banks nationwide would remain closed until at least March 13th. (Source: It was a Very Good Year)

 

Best March 6th in S&P 500 History:

 1998 – Up 1.99%

 

Worst March 6th in S&P 500 History:

1980 – Down 2.23%

 

Best March 6th in Dow Jones Industrials History:

 1902 – Up 1.83% or 0.87 points.

 

Worst March 6th in Dow Jones Industrials History:

1931 – Down 2.69% or 4.96 points.

 

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