Corporate Earnings

  • 01 Dec
    Here’s What Corporate Tax Reform Would Do For Stocks

    Here’s What Corporate Tax Reform Would Do For Stocks

    • There are two big things that can impact stocks, lower corporate taxes and a tax repatriation holiday.
    • We’ll discuss which stocks would benefit the most and if it makes sense to invest in them now to reap any kind of benefit from tax reforms or a tax holiday.
    • I’ll also share my opinion on the long-term impact lower corporate taxes would have.



    Introduction

    There’s a lot of talk about tax reform and how it should have a positive impact on the markets. However, it’s important to understand what exactly could happen and how it could impact your portfolio.

    In today’s article, we’ll discuss what all the fuss is about and see what the plausible impact on individual stocks and the stock market would be. 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 →

  • 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 →

  • 06 Oct
    Analysts Love This Metric. Here’s Why You Shouldn’t.

    Analysts Love This Metric. Here’s Why You Shouldn’t.

    • EV/EBITDA is a widely used metric these days, so every investor should understand what it is.
    • We’ll discuss how EV/EBITDA is calculated and how you can manipulate it.
    • There are some pros to using it, but also some cons.



    Introduction

    When I was just starting with investing, I remember that the beta coefficient was popping up everywhere, next to almost every stock price or price to earnings ratio.

    The beta coefficient has faded in the last two decades as it was clear that markets aren’t efficient and that there is no real usage of the metric. Now a new metric has emerged lately and is used by most analysts. More →

  • 01 Sep
    Yes, It’s Possible. No, It’s Not Hard. This Is How You Can Outperform The Market.

    Yes, It’s Possible. No, It’s Not Hard. This Is How You Can Outperform The Market.

    • The modern portfolio theory states that 30 stocks are enough for a portfolio.
    • However, every addition to your portfolio increases the likelihood of it being a loser.
    • A businesslike perspective offers a different approach that can lead to much better returns.

    Introduction

    There are millions of investing opportunities, from real estate, to stocks, bonds, options, derivatives, various funds, commodities, stamps, antiques, cars, and who knows what else. This makes all investors, from beginners to professional investors, very confused on what to invest in. In today’s article, I’ll give a perspective on how many positions one should have in their portfolio that you haven’t heard before. More →

  • 08 Aug
    Are Stocks & Bonds In A Bubble? Sven Thinks So…

    Are Stocks & Bonds In A Bubble? Sven Thinks So…

    • Earnings have been growing in the last 12 months, but haven’t grown that much over the last 20 years.
    • Even the Swiss central bank owns almost $3 billion worth of Apple’s stock.
    • After the dot-com and the housing bubbles, school books will talk about the central bank bubble in the future.

    Introduction

    All we see right now is the stock market continuing to go up. The S&P 500 is already up 9.7% year to date, and there is no sign that the trend might weaken or reverse. Over the last 8 and a half years, the index is up 242%. More →

  • 24 Jul
    It’s Feeling A Lot Like 2007 – Are You Prepared For The Next Crash?

    It’s Feeling A Lot Like 2007 – Are You Prepared For The Next Crash?

    • There’s nothing to worry about. Everything looks exactly the same as it did in July 2007 when no one was worried because the S&P 500 was breaking new highs.
    • Even the statements from the FED’s 2007 chair and the chair of it today look alike.
    • This doesn’t mean there will be a crisis in 2018, but it sure means you have to be prepared for anything.

    Introduction

    Last week I published an article describing how strong the trend is that is pushing the S&P 500 higher. There is plenty of liquidity, corporations are doing big buybacks, and most investors are putting their money into passively managed investment vehicles. More →

  • 26 May
    Corporate America’s Focus Isn’t On Shareholder Value Creation

    Corporate America’s Focus Isn’t On Shareholder Value Creation

    • Earnings haven’t grown in the last 10 years. What is corporate management doing?
    • A temporarily higher stock price isn’t good for the majority of investors, especially those investing for the long term and retirement.
    • Buybacks are idiotic, management pays $ 3million for a home they can build for $1 million.
    • There is only one company that does smart buybacks.

    Introduction

    There’s a huge problem affecting corporate America that nobody is seeing because most people think in positives and negatives, and can’t think on an relative scale. What do I mean by this? Well, when shareholders judge management, they look at whether the bottom line is positive and in line with what the competition is doing. Nobody is assessing whether it could have been much better.

    We expect only the best from our favorite athletes and we hope our children develop to their full potential but when it comes to corporate management, we remain mostly silent and accept whatever they throw at us. More →

  • 16 May
    When CEOs Become Delusional: The Case of Unilever’s Polman

    When CEOs Become Delusional: The Case of Unilever’s Polman

    • Unilever CEO Polman declared himself more competent than Buffet just because Unilever has outperformed Berkshire in the last 8 years. The funny thing is, Unilever outperformed thanks to Buffett.
    • Not only that, but Berkshire outperformed Unilever on revenue and earnings while at equal valuations, Berkshire would also largely outperform.
    • The 8-year bull market has clearly gotten into some CEOs’ heads. This creates a very dangerous situation for long term shareholder value creation.

    Introduction

    In an interview with Jim Cramer, I was thunderstruck to hear Unilever’s CEO (NYSE: UL), Paul Polman, tell the world that his returns have been better in the last 8 years than Buffett’s Berkshire Hathaway (NYSE: BRK.A, BRK.B). More →

  • 05 May
    The Market Is Dumb And Getting Dumber

    The Market Is Dumb And Getting Dumber

    • The number of analysts is declining, stocks don’t react to earnings nor news anymore, and the underlying economic environment is rigged.
    • However, as investors, we have to always look at risk and reward as there is always a way to profit.
    • Protecting yourself from market ignorance doesn’t even cost much.

    Introduction

    I would define a dumb investor as one who doesn’t think about risk in relation to reward, and therefore I fearlessly say: the majority of investors are behaving in a pretty dumb way.

    This is a heavy statement, especially considering markets have performed nothing short of spectacularly in the last 8 years. As evidence, the S&P 500 is up three-fold since 2009 and continues to strongly march ahead. More →

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