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Monday, 2 January 2023

Glossary (7)

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  Glossary Tax-loss selling —selling just prior to year-end to realize losses for tax purposes  Technical analysis —analysis of past securit...

Glossary (6)

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   Glossary Puttable bond —bond with embedded put features allowing holders to sell the bonds back to the issuer at a specified price and ti...

Glossary (5)

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   Glossary Net operating-loss carryforward (NOL) —the carryforward of past losses for tax purposes, enabling a company to shield future inc...

Glossary (4)

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  Glossary Inside information —information unavailable to the public, upon which it is illegal to base transactions  Institutional investors...

Glossary (3)

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  Glossary Efficient— market hypothesis -speculative notion that all information about securities is disseminated and becomes fully reflecte...

Glossary (2)

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  Glossary  Catalyst —an internally or externally instigated corporate event that results in security holders realizing some or all of a com...

Glossary (1)

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Glossary  Absolute-performance orientation —the tendency to evaluate investment results by measuring one’s investment performance against an...
Sunday, 1 January 2023

Investment Research and Inside Information

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How far is it reasonable to go in pursuit of information The investment research process is complicated by the blurred line between publicly...

Insider Buying and Management Stock Options Can Signal Opportunity

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Only one reason for insider buying In their search for complete information on businesses, investors often overlook one very important clue....

How Much Research and Analysis Are Sufficient?

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  Two shortcomings on trying to obtain perfect knowledge Some investors insist on trying to obtain perfect knowledge about their impending ...

Value Investing and Contrarian Thinking

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Value investing by its very nature is contrarian.  Out-of-favor securities may be undervalued ; popular securities almost never are.  What...

Market Inefficiencies and Institutional Constraints cause stocks to sell at depressed prices

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Ask:  Why the bargain has become available? The research task does not end with the discovery of an apparent bargain. It is incumbent on inv...

Knowing where to look for opportunities to invest

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Investment Research: The Challenge of Finding Attractive Investments  Investors are in the business of processing information While knowing ...
Friday, 30 December 2022

You must predict the future, yet the future is not reliably predictable.

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The difficulty of predicting the future even a few years ahead.  An unresolvable contradiction exists: to perform present value analysis, yo...

Many factors can derail any business forecast.

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Forecasting future growth is considerably imprecise Forecasting sales or profits many years into the future is considerably more imprecise...

Difficulty of Forecasting Future Cash Flow

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Present-Value Analysis and the Difficulty of Forecasting Future Cash Flow  When future cash flows are reasonably predictable and an appropr...
Thursday, 29 December 2022

Three useful yardsticks of business value

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 Business Valuation  To be a value investor, you must buy at a discount from underlying value.  Analyzing each potential value investment o...

The concept of a range of value:

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Businesses, unlike debt instruments,  do not have contractual  cash flows . As a result, they  cannot be as precisely valued as  bonds.  In ...
Wednesday, 28 December 2022

A Range of Value

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 A Range of Value Businesses, unlike debt instruments, do not have contractual cash flows . As a result, they cannot be as precisely valued ...

The Art of Business Valuation. BUSINESS VALUE IS IMPRECISIVELY KNOWABLE.

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  BUSINESS VALUE IS IMPRECISIVELY KNOWABLE Many investors insist on affixing exact values to their investments, seeking precision in an impr...