Happy Memorial Day. Today we solute our men and women in uniform. Our country would not be what it is without you. And of course I hope you are having a good day off work and off staring at the market changes to your 10 stocks. Last Thursday and Friday saw a selloff of tech… Read More »
You did all of your due diligence on a company. You looked at cash and debt. You liked its profit growth or revenue growth. You figured out a reasonable price for the stock. But immediately after you buy the stock for a fair price it declines. Why? Benjamin Graham would say: “In the short run,… Read More »
I mean that both literally and perhaps not so literally. There will be time when market value will decline and your gain will be negative. There will also be times when you want to sell a loser, and have a good reason. The hope is that overall your stock portfolio will gain, in time, much… 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 »
Efficient market theory is the idea that stock prices are priced perfectly based on all available public information. Maybe you’ve heard of it? Is Efficient Market Theory True? The stock markets are as efficient as they can be, but stock values are not priced perfectly. From one day to the next, the market can take… Read More »