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Thursday, 4 August 2016

A Random Walk Down Wall Street - Part Two 1: How the Pros Play the Biggest Game in Town

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Chapter 6. Technical and Fundamental analysis The efficient market theory (from academics) has three versions – the “weak,” the “semi-str...

A Random Walk Down Wall Street - Part One 6: Stocks and Their Value

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Chapter 5. The Firm-foundation Theory of Stock Prices Firm-foundation theorists view the worth of any share as the present value of all d...

A Random Walk Down Wall Street - Part One 5: Stocks and Their Value

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Chapter 4. The Biggest Bubble of All: Surfing on the Internet 1. The NASDAQ Index, an index essentially representing high-tech New Econom...

A Random Walk Down Wall Street - Part One 4: Stocks and Their Value

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Chapter 3. Stock Valuation from the sixties through the Nineties By the 1990s, institutions accounted for more than 90% of the trading v...

A Random Walk Down Wall Street - Part One 3: Stocks and Their Value

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Chapter 2. The Madness of Crowds The psychology of speculation is a veritable theater of the absurd. Although the castle-in-the-air theor...

A Random Walk Down Wall Street - Part One 2: Stocks and Their Value

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Chapter 1. Firm Foundations and Castles in the Air I. What is a random walk? 1. A random walk is one in which future steps or directio...

A Random Walk Down Wall Street - Part One 1: Stocks and Their Value

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Preface 1. Investors would be far better off buying and holding an index fund than attempting to buy and sell individual securities or a...
Tuesday, 2 August 2016

The great investors tend to focus on the process more than the actual outcome.

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Over time, the great investors tend to focus on the process more than the actual outcome. If you have a simple, proven, repeatable syste...
Thursday, 28 July 2016

What determines the returns from stocks?

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Very long-run returns from common stocks are driven by two critical factors: 1.  the dividend yield at the time of purchase , and, 2.  ...
Wednesday, 20 July 2016

A Guided Tour of the Market 13

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Utilities [...] utilities that provide electric service dominate the ranks of the publicly traded companies in the utilities sector. The...

A Guided Tour of the Market 12

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Energy Although energy can be harvested from myriad sources – coal, nuclear, hydroelectric, wind, solar – nothing can come close to chal...

A Guided Tour of the Market 11

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Industrial Materials The industrial materials sector includes a broad array of companies, which make everything from the fragrances used...

A Guided Tour of the Market 10

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Consumer Goods The consumer goods sector is composed of industries such as food, beverages, household and personal products, and tobacco...

A Guided Tour of the Market 9

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Telecom The telecom sector is filled with the kinds of companies we love to hate: They earn mediocre (and declining) returns on capital,...

A Guided Tour of the Market 8

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Media Media companies generate cash by producing or delivering a message to the public . The message, or content, can take several shape...

A Guided Tour of the Market 7

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Hardware The environment in the hardware sector makes it fiendishly difficult to build a sustainable competitive advantage because techn...

A Guided Tour of the Market 6

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Software Because technology buyers are inherently conservative and loath to buy products from a vendor that might go out of business and...

A Guided Tour of the Market 5

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Asset Management and Insurance With huge margins and constant streams of fee income, asset managers are perennial profit machines . Ho...

A Guided Tour of the Market 4

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Banks [...] the heart and soul of banking is centered on one thing: risk management. Banks accept three types of risk: (1) credit, (2) ...

A Guided Tour of the Market 3

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Business Services Because the business services sector is so varied, we divide it into three major subsectors based on how companies se...