alpha beta

Alpha Beta Risk and Return

My friend Brian called me last year, very excited about a stock he bought the week before, because it had gone up more than thirty percent in that week. Curious, I asked for the details. It was exactly what I feared: he had been talked into buying a penny stock. Now, I root for the underdog as […]

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Baked in

Baked In And The Efficient Market Hypothesis

When you read discussions on companies and their stocks on places like Fortune, the Wall Street Journal and Seeking Alpha, you’re bound to come across the term “baked in” a lot. Here is a recent example of a headline which includes the phrase, and here and here are two more. So… what does baked in mean, […]

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mutual funds 2

Mutual Funds: The Ultimate Halloween Story

This is a series just made in Britain, . The accent is British, the names are British, and they quaintly refer to London’s financial district as “The City,” as if everybody in the entire world knows exactly who they’re talking about. (And then they have the nerve to call Americans arrogant. ) Don’t be fooled […]

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Analyzing companies

Analyzing Companies: One More Thing

Although this post focuses on analyzing companies for investment purposes, the basic thoughts apply to all investments. The Future You invest for the future. And all investing decisions require you to take a view, or form an opinion, about the future. Problem is: nobody knows the future. The good news is most things continue tomorrow […]

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Cash flow

Make Serious Money: Look At Cash Flow

Now that you know the difference between cash flow and earnings, it’s time to get to the meat of the concept, one easily overlooked by lazy investors. In fact, an accounting professor created a bit of a stir in 1996 when he published an article essentially saying lazy investors can be suckered by managements who […]

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Cash flow

Cash Flow, Part 2

Do you love board games, or groan when others insist you play one? Even if you like them, how do you feel at a dinner party when the host drags out a game you’ve never heard of, blows a cloud of dust off it, and with an irrepressible grin insists, “Oh, c’mon! You’ll love it… everyone […]

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Cash flow

Cash Flow, Part 1

Cash is king — how many times have you heard that? However, the first thing you usually look at when sizing up a stock is its PE ratio. The E in that equation is Earnings Per Share (EPS), which is simply the company’s earnings divided by the number of shares. Where’s the cash in that? […]

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