It is Tuesday and time for a Warren Buffett quote: “Our favorite holding period is forever.” (The Motley Fool) What does this mean? Buy Stocks Like You Never Intend To Trade Them What would we do with stock of a company we never intend to trade? Nothing, basically. Just add to our holdings on occasion.… Read More »
Here is a video I recorded to show you other ways you can evaluate a stock on MSN: The rules of thumb I use to evaluate whether a stock would be one I want to buy are as follows: Cash Position – Current ratio greater than 1 Current ratio is how much cash a company… Read More »
The following are the things we learned this week: We learned why we might want to invest. We invest to beat inflation, for compound growth, and just for the fun of it. How we can make 22.99% tax free! Spoiler – It is saving money by paying extra to your credit cards until they are… Read More »
If you are working for somebody else and you have a 401(k) plan available to you, should you contribute? How much should you contribute? What should you invest in? Can you borrow against a 401(k)? What should you do with the 401(k) when you change jobs? Should You Contribute To Your 401(k)? A simple question… Read More »
If you invest in the stock of one company, you run the real risk of losing money. Not because the market value will go down, but because Chapter 11 could happen. That’s bankruptcy. Typically stock holders get nothing in bankruptcy. By the way, risk doesn’t mean it will happen, it just means there’s a higher… Read More »
Facebook is a publicly traded company that *I do not own*. Not because it’s a bad company or anything, just because it’s not one of my 10. I thought maybe today we would evaluate the financials of Facebook on MSN money. Down in the Quote Search (see screen above), type FB because that is the… Read More »
I thought today I would answer the bigger question of why a person would want to invest in stocks? To make money is simply not good enough. You can make money with a savings account right? Here are some of the reasons you would want to invest: To beat inflation. Inflation causes your cash to… Read More »
Before I get into what we have learned, I have learned we were picked for the FeedSpot top 100 trading blogs at position 103. I guess we are in the top 103. You can find the page at: https://blog.feedspot.com/trading_blogs/ Let us break down what we have learned this week: It is important to be debt… Read More »
The short answer is discounted present value of future earnings (profits). You can do that in two formulas within a spreadsheet… However, let’s understand it from a basic pretend stock. Acme Widgets earns $5 per share per year. They have earned $5 per share for the past 5 years and are expecting $5 per share… Read More »
Diversification is the idea that owning stock of companies in different businesses, different sectors, and or different regions reduces the risk of a portfolio. While there are some extreme cases where diversification might prevent actual loss, the main thing diversification does is reduce volatility. What is Risk? Risk is the likelihood that you will make… Read More »