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Thursday, 28 May 2009

Kenneth L. Fisher on How to Time the Market

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Kenneth L. Fisher on How to Time the Market "There is no end to the lengths people go to try to find the magic key to the stock market....

Peter Lynch's Pearl of Wisdom

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Another One of Peter Lynch's Many Pearls of Wall Street Wisdom Lynch once said in an interview that putting money into stocks and counti...

How to employ buy and hold in our overall investing philosophy?

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How to employ buy and hold in our overall investing philosophy? The more you trade, the less well you do. Have a strategy and then let that ...

Redefining Risk

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Traditionally, investors view "risk" as being synonymous with "volatility." They believe that to get higher returns, the...

Observing Long-Term Investing

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Observing Long-Term Investing Study the 2 lists of the top 30 shareholders of a particular company below. Excluding the institutions, there ...
Wednesday, 27 May 2009

Total Returns vs Total Wealth vs Total Real Returns

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Total Returns Total returns means that all returns , such as interest and dividends and capital gains, are automatically reinvested in the...

Volatility is the friend of the Value Investor (2)

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Volatility is the friend of the Value Investor (2) September 3, 1929: DJIA hit a historical high of 381.17 Seven weeks later, stocks crashe...

Volatility is the friend of the Value Investor

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Volatility is the friend of the Value Investor May 1994 Dow Jones Industrial Average 3,700 Interest rates rising rapidly. Worst year in the ...
Tuesday, 26 May 2009

PE Ratio and Future Stock Returns

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PE Ratio and Future Stock Returns Although the PE ratio can be a very misleading indicator of future stock returns in the SHORT RUN, in the ...

Valuing the Market - Market PE Ratio

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Valuing the Market - Market PE Ratio The Price-to-Earnings Ratio The most basic and fundamental yardstick for valuing stocks is the PE ratio...

Long-Term Earnings Growth and Economic Growth (2)

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Long-Term Earnings Growth and Economic Growth (2) Long-Term Growth of GDP, Earnings and Dividends, 1871 -2001 Real GDP Growth 3.91% Real Per...

Long-Term Earnings Growth and Economic Growth (1)

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Long-Term Earnings Growth and Economic Growth (1) How do you value stock? Stock prices are the present value of future dividends. What are t...

Valuation of Cash Flows from Stocks

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Valuation of Cash Flows from Stocks Stocks have value only because of the potential cash flows that investors receive. These cash flows can...

Fed Model of Stock Market Valuation

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Fed Model of Stock Market Valuation Greenspan's testimony in his semiannual address to Congress in 1997 suggested that the central bank...
Monday, 25 May 2009

Does the value of stocks depend on dividends or earnings?

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Does the value of stocks depend on dividends or earnings? Management determines its dividend policy by evaluating many factors, including: t...

Sources of Shareholder Value

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Sources of Shareholder Value For the equity holder, the source of future cash flows is the earnings of firms. Earnings create value for sha...

Nature of Growth and Value Stocks

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Nature of Growth and Value Stocks These designations are not inherent in the products the firms make or the industries they are in. The ter...

Stocks and the Business Cycle

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Stocks and the Business Cycle The stock market has been surging to new highs almost daily, driving down dividend yields and price-earnings r...

Risks and Investors' Holding Period

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Risks and Investors' Holding Period Total Real Returns The focus of every long-term investor should be the growth of purchasing power -...

Reap the benefits of market volatility

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Reap the benefits of market volatility When stocks are collapsing, worst-case scenarios loom large in investors' minds. On May 6, 1932, ...