Over the last several weeks, the threat of a trade war between the United States and China has put a lot of pressure on the broad market. Virtually every sector of the economy could be affected by U.S. tariffs More →
The stock market (S&P 500) didn’t go higher last month, which is, to be a bit sarcastic, very strange. More →
I know that if I buy a stock with a price to earnings (P/E) ratio of 10 and stable future business prospects, my very long-term return should be around 10%, plus inflation and eventual growth. If I buy a stock at a P/E ratio of 5, my returns will be around 20%, while if I buy a stock with a P/E ratio of 20, my returns will be around 5%. It’s as simple as that, in the long term. More →
Recently, we analyzed Seth Klarman’s amazing performance and investing rationale. There were some pretty difficult things to digest, like the fact that he underperformed the S&P 500 by 50% in the late 1990s.
But this leads us to some very interesting questions: Do we properly measure investment success? Is the investment manager that invested in internet stocks in the period from 1996 to 1999 a good manager? Similarly, is the manager that created wonderful returns in the last 7 years by being long U.S. stocks a good manager? More →
Using data from Quant, I’ve analyzed 1,626 U.S. stocks.
The factors I’ve analyzed are: market capitalization, current and forward PE ratios, price to book value, dividend yield, percentage short, analysts’ targets, 52-week highs and lows, and earnings per share growth.
The goal of this analysis is to provide insight into how to beat the market in 2017. I believe that research, thorough analysis, and patience will always outperform the market, especially because the distribution of the above-mentioned factors is all over the place as you will see below. More →
The pharmaceutical sector has been one of the worst performers in 2016. It’s down 11.22% year-to-date while the S&P 500 is up 13.37%.
From a longer-term perspective, the pharma sector has largely outperformed the S&P 500. From the low point in the 2009 financial crisis, the iShares U.S. Pharmaceuticals ETF (IHE) has gained 291% while the S&P 500 has gained 233%.
Today, we’ll analyze sector trends, risks, and the fundamentals of potential pharmaceutical investments to see if the recent pullback is an investment opportunity. More →
This summer, I was in Italy and buying some olive oil. As we use mostly olive oil in our kitchen, I bought 10 liters of this special oil, enough to last for a few months. More →
Accounting is an essential part of analyzing a company as different accounting regulations and principles bring about totally different analysis results.
In today’s article, I’m going to give you a small piece of insight on how I do research, how it differs from the usual screening processes that most use, and why it is important. I won’t elaborate on all the possible inconsistencies instance-by-instance as that analysis is better left to books on accounting. Instead, we will discuss one small line item on the balance sheet, goodwill, and how it can severely skew one’s perception of a company. More →
The $64 million dollar question asked by every investor is, “when is the right time to make an investment and actually buy shares in the said company?”
One of the big advantages of value investing is the fact that the question of when you should invest, while never being irrelevant, is only a secondary concern.
The focus is on first determining whether a stock is available at a discount compared to how much the business is worth; if a discount exists, the value investor has an immediate advantage over the rest of the market (which has yet to recognize the stock should be priced higher than it is) and should take a position as quickly as possible. More →