Jason and Frank both purchased 100 share positions in Microsoft Corporation (MSFT) after its share price dropped 11% because of lower-than-expected earnings guidance. I wanted to chime in on my assessment of the company, and share why I think now is not the time to buy.
Let’s briefly talk about two indicators, ROC and Equity Growth, that are useful when looking at the strength of a company. Both these tools, used by Warren Buffett, demonstrate how fast a company can grow the money it has to invest in itself.
Recently one of our readers sent us an email asking us how to invest in a foreign company. Below you’ll find their oringinal question, and a tidier version of my response to it. Which contains a bit more information than when I first responded.
Simple questions: If I found a company (Australia’s Peplin: PEP) that
looks promising, how would I buy shares? How would an American buy PEP,
for example? Could I do this through ETrade?
After the recent release of Phil Town’s book, Rule #1 (review), many people seem to be asking about “the arrows.” What are these mysterious arrows anyway? And can you make money just by using them?
Arrows are simply a visual way to show a chart reader that a key statistic has generated a buy or a sell signal. Buy signals are usually green arrows pointing up and sell signals are usually red arrows pointing down.
Becoming wealthy is a full-time job. Successful entrepreneurs have worked for years to build a deep knowledge base in areas as diverse as sales, marketing, accounting, stock investing, real estate investing, leadership, team building and personal finance. For someone who is still laying his foundation, finding a mentor can help him avoid potholes he otherwise would not have seen, and is an invaluable asset as both a friend and a counselor.
A mentor is someone who has already done what you have set out to do. Whether that means becoming a successful stock investor, or real estate mogul, your mentor is an expert and is willing to share his experiences. Just as professional baseball players have pitching coaches and managers have leadership coaches, so should budding entrepreneurs have a mentor that can help steer them down the right path.
As small, inexperienced investors, we are unable to take advantage of the full range of available investment opportunities. In an effort to protect small investors, the 1933 Securities Act enacted rules about which securities must be registered with the SEC and which can be offered privately. Because registration is time-consuming and expensive, companies with smaller needs may prefer to promote their investment opportunity privately, but because there is less oversight, the SEC allows only wealthy and experienced individual investors to participate, along with qualifying organizations.
I’d like to cover two topics with this post, and get some advice from our readers on them. The first being my Roth IRA, and then some musings regarding HSAs. So read on and let me know what you think.
Phil Town’s upcoming book Rule #1 is sure to become an investment classic. I had the pleasure of reading the book after receiving an advanced copy from Crown Publishers, the distributor of the book which is scheduled to be released in March. What I found was a practical, no-nonsense approach to stocks that will do for investing what David Bach’s The Automatic Millionaire did for personal finance. While Town himself admits that the techniques he describes have been used for years, his true genius lies in his ability to translate classic investing principles into a straight-forward approach that can achieve at least 15% returns a year with little risk.
In Part 1 of this article, we looked at how to use the Morningstar Premium Fund Screener, and I showed you two screens I use to select top funds for my portfolio. This article will move on from the screening phase of the stock screening process to the analysis phase, where we actually choose the candidates for possible investment. The key to successful analysis is understanding how to read the results views provided by the screener. In addition to the basic views provided by Morningstar, the premium screener also allows you to create up to two additional views. By creating custom views that package your most important statistics together, decision making can be more rapid and accurate.
Pro forma earnings (sometimes spelled “proforma” or “pro-forma”) are included by some companies in their quarterly or annual reports as a way to discount “unusual and non-recurring transactions” to more accurately reflect their true financial health. But while actual earnings are calculated using Generally Accepted Accounting Principles (“GAAP”), the US standard for corporate accounting, pro forma earnings are used as guidance for investors to demonstrate how much money a company would have earned had unusual and one-time charges not occurred. As one would expect, pro forma reporting has had a history of abuse and therefore should be approached with great care.
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