4 Financial Statement Red Flags
The most important thing for investors is not to lose money. As Warren Buffett once said: “The first rule of an investment is don’t lose money. And the second rule of an investment is don’t forget the first rule. And that’s all the rules there are.” Buffett means that investors should first focus on the […]
Understanding Financial Engineering For Investors
According to the Britannica Dictionary, an engineer is defined as: “a person who has scientific training and who designs and builds complicated products, machines, systems, or structures: a person who specializes in a branch of engineering” Engineering drives our modern world. From the buildings we live in to the cars we drive to the computing […]
The Psychology of Investing: Overcoming Common Behavioral Biases
Brains are important in investing. To excel in financial markets, you need to understand basic mathematics, how financial statements work, and the intricacies of business models. But what if I told you there was something 10x more important than pure smarts to succeed as an investor: your emotions. Managing your psychological state and the biases […]
Understanding Share Buybacks and Capital Allocation
Buybacks are an important part of the investing world. Yet, many people misunderstand them. The S&P 500 – the largest 500 profitable businesses publicly traded in the United States – spent a collective $795 billion on buybacks in 2023 and $922 billion in 2022. Otherwise known as share repurchases (the terms are interchangeable), politicians and […]
Navigating the Basics of Tech Stocks
The world is awash in technology. If you look at a list of the 10 largest stocks in the world by market cap, eight could be considered technology companies. Of the other two, one is a state-owned oil producer, and the other is the investing conglomerate Berkshire Hathaway. Ever since the dawn of the internet, […]
Is Investing In IPOs a Scam?
Nothing may be more exciting than a new stock entering the public markets. Financial media will cover its every move as Wall Street scrambles to get a piece of the young, sexy company that tells a great story. We’ve seen it all plenty of times before. Most companies enter the stock market through an initial […]
Understanding Net Income Margin In Investing
As an investor, it is important to understand how much profit a company generates. However, for a beginner, it can be difficult to determine what definition of profitability to use in your analysis. Should I use gross profit? Operating profit? Net income? Free cash flow? Adjusted EBITDA? The list of financial metrics is endless, especially […]
Risk Management For Beginners
When you invest your savings, you are taking on risks. This is an unavoidable fact for investors. Even if your entire portfolio is United States treasury bonds, you are still taking on some level of risk, no matter how small. The hope is that any potential rewards in the form of wealth creation outweigh these […]
Using a DCF Model to Value a Stock
Investors are inherently predicting the future. Whether with an individual stock or a basic index fund, deciding to park your savings in a financial asset means you are making a bet about the future value of that asset. Otherwise, why would you buy it? Suppose you treat stock analysis as no different than analyzing a […]
Reading the Numbers: How to Analyze a Stock as a Beginner
Gross margin. Marketable securities. Earnings per share. These are all words you will find on the financial statements of publicly traded companies. Otherwise known as stocks. If you’ve never taken an accounting course, you likely have no idea what these terms mean. Analyzing stocks can be daunting for first-timers. There is foreign-sounding language, confusing SEC […]
