Investing Strategy

  • 09 Oct
    Sunday Edition: The Most Important Pattern In A Bear Market Bottom

    Sunday Edition: The Most Important Pattern In A Bear Market Bottom

    Over the last several months we’ve focused on sharing with you several of the fundamental metrics Thomas Moore uses to identify deeply undervalued companies on which to sell put options to generate income. We hope they’ve been beneficial.

    In today’s Sunday Edition I’m certain to draw a lot of skepticism from those “purists” who believe that markets are both efficient and driven exclusively by the fundamentals.

    On the other hand, if you believe that markets are not only irrational but are driven by psychology and what some like to refer to as “animal spirits,”  then you might appreciate what I share over the next several weeks in these Sunday Editions. More →

  • 06 Oct
    Is Your Brain Wired For Investing?

    Is Your Brain Wired For Investing?

    • Recency bias, probability neglect and aversion loss are just a few of the concepts that we, as humans, find difficult to avoid in our investing.
    • The average U.S. investor underperformed the market by 7.4% per year in the last 30 years as a result of taking action under the influence of emotions.
    • Fundamentals, valuations and dollar cost averaging can help you put your emotions aside.

    Introduction

    Today we’ll discuss how humans aren’t really mentally prepared for investing. We are wired to survive in the woods with a freeze, fight or flight system, which has nothing do to with the markets. There is no threat of death when it comes to investing in the markets. More →

  • 02 Oct
    Sunday Edition: Diversification or Accumulation?

    Sunday Edition: Diversification or Accumulation?

    Joel Greenblatt, in my opinion, is one of the greatest value investors of all time. 

    One thing that sets him apart from many other investors is his willingness to concentrate on a handful of deeply undervalued companies rather than diminish his returns through over diversification, or as Warren Buffett once said “diworsification.

    So how many stocks is the right amount to own to be diversified enough, yet not diminish your potential returns? More →

  • 25 Sep
    Sunday Edition: Why Assignments From Put Sales Enhance Income Generation

    Sunday Edition: Why Assignments From Put Sales Enhance Income Generation

    I have wanted to write this for quite some time because it needs to be said. I’m sure I will piss off a few people but I can live with that if a few others grasp the wealth building concept I’m trying to make.

    A little over two years ago we launched our Rebel Income newsletter with a focus on income generation by selling put options, collecting dividends, and writing covered calls.

    The impetus behind launching this service was the current retirement crisis where most retirees have severely underfunded retirement accounts—the average account balance of those between the age of 55-64 is $104,000—and we live in a world of negative interest rates. More →

  • 18 Sep
    Sunday Edition: Stock Dividends – IRS-Friendly Sacred Cow, or Value Analysis Tool?

    Sunday Edition: Stock Dividends – IRS-Friendly Sacred Cow, or Value Analysis Tool?

    In today’s Sunday Edition, Thomas Moore corrects three major fallacies which so many investors hold true when it comes to investing in dividend paying stocks.

    As Thomas illustrates, investors who succumb to these fallacies might only earn half the return that other more informed value investors might generate. More →

  • 14 Sep
    Diversify Like The Big Boys Do

    Diversify Like The Big Boys Do

    • Temporal diversification diversifies your portfolio through time by buying only the assets that are cheap at the moment and avoiding the ones in a bubble.
    • By buying in cycle troughs you enjoy high-dividend yields that allow you to buy other assets that are in temporal distress.
    • This high yield lowers the need to sell and lowers your tax bill.

    Introduction

    Today we’ll introduce you to a new concept—“temporal diversification,” a term that has begun to gain traction, especially in academic circles—that isn’t yet common knowledge but is already being used by the best investors. Using the example of Berkshire Hathaway, we’ll provide an overview of the concept of temporal diversification and will provide some ideas for increasing your returns by diversifying your portfolio not just for the current moment, but for your whole investing life. More →

  • 13 Sep
    What To Expect From The Markets Now

    What To Expect From The Markets Now

    • The German bond’s 3% loss on a 12 basis point yield move shows how risky bonds are right now.
    • The value of the S&P 500 should be around 1,600 but could go lower with bad economic news.
    • Bonds and stocks seem very risky as they both have low yields and large downsides.

    Introduction

    Last Friday was a pretty scary day in the financial markets. The S&P 500 lost 2.45% and bonds also lost ground due to higher yields.

    Stocks and bonds are correlated and don’t provide quality diversification. We have been warning about the risks inherent to bond investing for a while with warnings that the low yields mean high risk and low returns. More →

  • 11 Sep
    Sunday Edition: Identifying Undervalued Stocks

    Sunday Edition: Identifying Undervalued Stocks

    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 →

  • 08 Sep
    Getting Bored? You’ll Want To Read This

    Getting Bored? You’ll Want To Read This

    • Wall Street doesn’t make money if things aren’t moving, so beware of interesting new investment vehicles marketed with the guise of offering you better returns.
    • In this article, we’ll share an old investing gem that is essential to know for every investor.
    • The time to spice up your portfolio is when it looks like the world will end tomorrow.

    Introduction

    It has been a boring summer. The S&P 500 reached new highs, but has traded in a 2% trading range for the last two months.

    The situation isn’t better in the longer term. In the last two years, the S&P 500 is up 4.3% per year which is not spectacular for stocks, but it’s also not bad. More →

  • 05 Sep
    Do Your Future Returns A Favor

    Do Your Future Returns A Favor

    • S&P 500 companies are not only returning more cash to shareholders than their earnings, but also more than their cash flows.
    • The trend is resembling the one prior to the financial crisis.
    • Not all stocks are unsustainable with their cash returns, so check your portfolio.

    Introduction

    A common piece of financial advice is not to spend more than you earn as it will eventually put you in trouble. Well, this is exactly what corporate managers are doing. Through dividends and buybacks they are spending more than they are earning. If the common advice is of any value it should be trouble ahead for the stocks that are doing so.

    In this article we are going to analyze the situation, look at the real short and long term risks and conclude in fashion. More →

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