Stocks

  • 03 May
    Buffett Thinks You Can Turn $400 Into $400,000, But Here’s The Reality

    Buffett Thinks You Can Turn $400 Into $400,000, But Here’s The Reality

    Buffett recently gave an interview where he discussed how if he would have invested the first $114.75 he made in 1942 in the S&P 500 and reinvested the dividends, he would now have $400,000.

    That’s a nice way to sell the stock market to people, but I really disagree with Buffett and with what he’s selling. Today, I’ll discuss reality.




    More →

  • 26 Apr
    Here’s How A Defensive Investor Should Think About Stocks

    Here’s How A Defensive Investor Should Think About Stocks

    We all like common stocks, but in this stage of the economic cycle we should also be defensive. Therefore, it’s a perfect time to discuss Chapter 5 of Benjamin Graham’s book The Intelligent Investor – The Defensive Investor and Common Stocks.



    The topics we’ll discuss today are:

    • Four rules to follow when buying stocks.
    • Growth stocks.
    • Dollar cost averaging.
    • Investor’s personal situation.

    More →

  • 25 Apr
    Here’s Why You Should Worry About What Happened In The Market Yesterday

    Here’s Why You Should Worry About What Happened In The Market Yesterday

    The thing with the stock market is that it gives you signals way ahead of time, but nobody wants to listen. The things I’ve been blabbering about over the past two years are the following:

    1. Higher interest rates will come just as the FED told us they would.
    2. Higher interest rates will squeeze valuations.
    3. Higher interest rates will slow down economic growth.
    4. Higher interest rates will slow down earnings growth.

    So, let’s start by discussing these.



    The 10-Year Treasury Passes 3%

    When the 10-year Treasury was below 3%, nobody seemed to care except a few crazy analysts like this scribe. However, when it crossed 3%, the market suddenly looked at what had been going on for nearly the last two years. More →

  • 18 Apr
    These 4 Steps Will Save You In The Upcoming Market Crash

    These 4 Steps Will Save You In The Upcoming Market Crash

    A stock market crash is always around the corner.

    In the last 18 years, we’ve seen two crashes of 50% and if you live in the Netherlands, you still dream of those 2000 highs. Nevertheless, a 9-year bull market quickly erases all the painful memories.

    But forgetting what happened and how it looked is dangerous. If you haven’t lived through a stock market crash, you should at least try and think about it in order to be prepared as much as you can be.



    More →

  • 16 Apr
    Have Everything In Stocks Now? Here’s Why You’ll Want To Rethink That

    Have Everything In Stocks Now? Here’s Why You’ll Want To Rethink That

    • As crazy as it sounds, one shouldn’t have everything in stocks.
    • Perhaps the best counter option right now is short term bonds.
    • We’ll discuss Graham’s take and apply a contemporary perspective on it.



    Introduction

    Today, we’re going to continue our review of Benjamin Graham’s The Intelligent Investor with a discussion on the fourth chapter, General Portfolio Policy: The Defensive Investor.

    Graham clearly differentiates between aggressive and defensive investors where an aggressive investor spends a lot of time on research while a defensive one enjoys life. No matter whether you’re aggressive or defensive, this chapter is crucial for this environment as being defensive might be the most aggressive thing one can do. More →

  • 09 Apr
    These Will Be The Causes Of The Next Recession

    These Will Be The Causes Of The Next Recession

    After a long period of stillness, we are finally seeing two-way markets which is a clear indication that the market is looking for direction.



    Last week we saw two days with drops larger than 2%, and the so called Kudlow rally on Wednesday. More →

  • 06 Apr
    Graham Has Some Words Of Wisdom For When The Market Crashes

    Graham Has Some Words Of Wisdom For When The Market Crashes

    Today, we’ll continue on with our series on The Intelligent Investor and applying Benjamin Graham’s everlasting knowledge to the current market in order to avoid doing stupid things while taking advantage of others’ stupid actions.

    Graham’s data goes up to 1971, so we’ll first look at his data and later discuss the insights that can be applied to the current market situation.



    The main points Graham emphasizes that we can learn much from are:

    • The varying relationships between stock prices and their earnings and dividends.
    • It’s important to understand the manner in which stocks have made their underlying advance through the MANY cycles of the past century (emphasis mine).
    • Look at successive ten-year averages of earnings, dividends, and stock prices.

    More →

  • 23 Mar
    Benjamin Graham Has Some Words Of Wisdom On Today’s Market

    Benjamin Graham Has Some Words Of Wisdom On Today’s Market

    Probably the best book out there for long term investors is Benjamin Graham’s book, The Intelligent investor. However, the most recent publication is from the 1970s, so I’ll go through the book in a series of articles in order to extract what is still relevant.

    Believe me, there’s still plenty of relevant material, especially in this market. This will allow us to compare the current market with essential value investing wisdom and perhaps improve our risk reward perspective on things.



    Let’s start with chapter 1, Investment Versus Speculation: Results to be expected by the Intelligent Investor. This chapter discusses the appropriate portfolio policy for the individual investor, an everlasting topic. More →

  • 12 Mar
    Watch Out, Your Value Is Being Stolen

    Watch Out, Your Value Is Being Stolen

    • Book value might be the biggest not risk, but loss of value in the current market environment.
    • A full year of S&P 500 earnings evaporates every 3.5 years.
    • Fortunately, there is something you can do.



    Introduction

    Today, I’ll continue with my series on market risks. These are the main market risks I see and you can read more about them by clicking on the links provided:

    • Debt is being used recklessly.
    • Valuations don’t matter as growth is the key and profitability will come.
    • Book values are so old fashioned.
    • Stocks can only go up and corrections and bear markets don’t last long.
    • If you invest in index funds, you will do well.

    In this article, I’ll focus on book values which are often an omitted metric, especially late into a bull market, but are extremely important. More →

  • 09 Mar
    Want To Get The Best U.S. Companies At 50% Off? You Might Get That Chance Soon

    Want To Get The Best U.S. Companies At 50% Off? You Might Get That Chance Soon

    • A look at the DJIA from a valuation perspective will give us a good indication of future returns.
    • I’ll also give a cyclical perspective on stocks by looking at their CAPE ratios.
    • As well as explain how valuations usually contract and expand alongside earnings.



    Introduction

    Two days ago, I discussed how valuations may be the biggest risk to stocks at this moment. Building on that, I want to go through the Dow Jones Industrial Average (DJIA) and discuss the valuations there.

    The DJIA, unlike the S&P 500, is an arithmetic average weighted index and it is far less industrial than it was when it was formed in 1885. Nevertheless, it still gives a good impression of how the American economy is doing.

    What I want to build on are valuations.

    More →

1 2 3 4 11
Search