• 03 Nov
    This Stock Could See A Fivefold Increase In Price, But The Risks Are Huge

    This Stock Could See A Fivefold Increase In Price, But The Risks Are Huge

    Being a value growth investor, I’d recommend a stock that has a strong margin of safety—thus little chance of permanent capital loss—while also having huge upside coming from market recognized or unrecognized catalysts.

    There are some investments out there where the potential loss is total while the potential upside is extremely high. I wouldn’t call these investments, and only would recommend one as it’s more like a bet.

    To keep things interesting, today I want to share with you such a bet by discussing a non-linear stock with out of the box thinking management, McEwen Mining (NYSE: MUX). MUX will give you a clue as to how I research potential investments and analyze their risk reward ratios.



    McEwen Mining

    MUX is a producing, developing, and exploring gold/coper miner. Currently, it produces only gold, so the market puts it into the gold miners basket. Nevertheless, it has 3 producing mines in Ontario, Mexico, and Argentina, two gold mines in development, and various exploration targets. More →

  • 02 Nov
    Discussing S&P 500 Earnings & What Wall Street Won’t Tell You

    Discussing S&P 500 Earnings & What Wall Street Won’t Tell You

    • I’ll first describe what’s going on with earnings as 55% of companies have reported. We’ll discuss insurance a bit more.
    • A helicopter view shows that the S&P 500 averages have a large distribution.
    • I’ll conclude with some inconsistencies everyone should be aware of when listening to Wall Street and earnings.



    Introduction

    55% of S&P 500 companies have now reported earnings, and it’s always nice to check those aggregate earnings to see how the market is breathing.

    I‘ll show you the data from the current earnings, which are very interesting, but I’ll also show you the difference between what Wall Street is painting and reality. Let’s start with current earnings. More →

  • 01 Nov
    Are You Saving Enough? Probably Not, Here’s How You Can

    Are You Saving Enough? Probably Not, Here’s How You Can

    • Today, I’ll discuss Thaler’s Save More Tomorrow concept and the behavioral issues that impact how much we save and invest.
    • Secondly, I’ll dig into how much someone is supposed to save and invest to reach a future target.
    • I’ll conclude with this question: are you saving/investing enough?



    Introduction

    Yesterday, we discussed Nobel prize winner professor Richard Thaler’s findings in the field of behavioral finance.

    Thaler’s findings can really help us to lower our investment risks and increasing our returns. However, investing isn’t only about picking the right stock or properly timing a trade, it’s also about carefully allocating our capital in investing in the first place, thus saving for investing. More →

  • 31 Oct
    Asking Yourself These 7 Questions Will Make You A Better Investor

    Asking Yourself These 7 Questions Will Make You A Better Investor

    • Today, we’ll look into Richard Thaler’s work to find out how to take advantage of behavioral finance.
    • Taking advantage goes hand-in-hand with not making behavioral mistakes.
    • A few examples and 7 questions will give you plenty of food for thought.



    Introduction

    The recent Nobel prize in economics was awarded to Richard Thaler from the Chicago Booth School of Business for exploring the biases and cognitive shortcuts that impact how people absorb and process information. More →

  • 30 Oct
    They May Be Cheap, But Don’t Buy Retail Stocks Now – Here’s Why

    They May Be Cheap, But Don’t Buy Retail Stocks Now – Here’s Why

    • Don’t look at past figures and expect them to suddenly reappear. Retail is a tough business with tight margins.
    • Retailers have experienced a margin decline recently. But there’s still plenty of room for them to fall further and the situation may get really ugly.
    • Some will win, but who can identify the winners now?



    Introduction

    Retail stocks keep getting cheaper and cheaper, and many investors look at current valuations and think they are too cheap to be true. In today’s article, we’ll dig into the sector, see if there is value, or if the “too cheap to be true” retailers are all just Potemkin’s villages.

    Before digging into specifics, I want to share a retail example from my neighborhood. More →

  • 27 Oct
    These 8 Charts Will Change Your Mind On Buy & Hold Investing

    These 8 Charts Will Change Your Mind On Buy & Hold Investing

    • If you take a different perspective on the stock market, things aren’t all that rosy.
    • If the stock market has done well in the last 15 years, it probably won’t do that well in the future.
    • I’ll share 5 things that will enable you to reach satisfying returns in the long term, no matter what happens in the stock market.



    Introduction

    Today, I’ll discuss two academic research papers that look into slightly longer stock market periods to analyze returns in order to stress the importance of DIY investing and taking responsibility for our financial lives.

    I’ll conclude today’s article with some insight on what to look for in stocks to outperform the market in the next 15 years. More →

  • 26 Oct
    Buybacks Destroy Blue Chip Stocks, GE Is A Prime Example

    Buybacks Destroy Blue Chip Stocks, GE Is A Prime Example

    • GE spent more than $21 billion on buybacks in 2016. The stock price is now down more than 30%, thus that $21 billion was thrown away.
    • Other S&P 500 companies aren’t much better and their time to reckon with financial engineering will come too.
    • The more buybacks a company does, the lower the market cap will be in 5-years, which is something managers don’t want to know.



    Introduction

    In December 2016, I wrote an article titled Is Your Value Being Destroyed? where I discussed how buybacks are destroying long term shareholder value.

    My favorite example from that article was General Electric (NYSE: GE) because it seemed completely illogical to me that a company would sell valuable assets in order to increase buyback activity because this isn’t how you operate a business, this is pure short term financial engineering. More →

  • 25 Oct
    How To Calculate Intrinsic Value & Why You Need To

    How To Calculate Intrinsic Value & Why You Need To

    • Calculating the intrinsic value of a stock is essential for making any kind of buy or sell decision.
    • However, intrinsic value is different for everyone and depends on what you expect from the market.
    • Attaching a margin of safety to intrinsic value is all you need for low risk high return investments.



    Introduction

    99% of the what’s discussed about stocks is whether a stock is undervalued or overvalued and where will it go as you wouldn’t be a proper analyst without a price target on every stock you discuss.

    This is completely the wrong way to approach investing, but we as analysts will continue to deliver what the market wants. More →

  • 24 Oct
    Moral Hazard Is At An All-Time High – Here’s What You Can Do About It

    Moral Hazard Is At An All-Time High – Here’s What You Can Do About It

    • It’s funny how moral hazards have been discussed less and less since 2008, but it looks like they are at their highest since then.
    • We’ll discuss a few examples of current moral hazard issues and how to position yourself in relation to such situations.



    Introduction

    In today’s article, I’ll discuss how moral hazard is growing but nobody seems to care which is usually the way things are as nobody cares while things are good.

    I’ll conclude today’s article with a way to take advantage of moral hazard. More →

  • 23 Oct
    This Is How You Get Returns Over 1,000%

    This Is How You Get Returns Over 1,000%

    • There are many examples of simple investments that returned more than 1,000%, some even 10,000%, over the last few decades.
    • In order to take advantage of such investments, you have to look at the extremes of what could happen in the next few years that aren’t included in the current economic models that use statistical averages.
    • Statistical averages are what you have to look for to protect you from negative surprises and open your portfolio to extremely positive surprises.



    Introduction

    A friend of mine just sold his home in Central London for 2.4 million pounds which is an average price in London. However, what’s interesting is that he bought the property in 1996 for just 160,000 pounds. In just 20 years, the value of his London property increased 15 times.

    Another example I have is from a recent WSJ article where a Park Avenue penthouse is selling for about $18 million. The funny thing is that the property was empty for 27 years as it was owned by the Former Republic of Yugoslavia which also allows us to know what the purchase price was in 1975. The purchase price was $100,000. In 40 years, the value of this property in New York increased 180 times. More →

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