The Basics of the Short Ratio, Short Selling, and Short Squeezes

The short ratio is a widely-used tool by short selling hedge funds and other portfolio managers in the stock market. The short ratio indicates the number of shares that investors sell short over the average daily volume of the stock, on the basis of 1 or 3 months. Short selling exploded to the scene in […]

4 Reasons a Buy and Hold Strategy in Crypto Could Be a Terrible Idea

The technology behind crypto is very promising. Blockchain apps are unlocking decentralized solutions that could make the world a much better place. That does not mean buying and holding crypto will be a successful strategy for serious long term investors, however. Buy and hold works. It might not work for crypto. Here are 4 reasons […]

Why Diversification is Important in Investing (Timeless Principle)

Diversification is important in investing because you don’t want a single mistake to destroy your portfolio. Even the best investors (and businesses) make mistakes, it’s only human nature. Diversification spreads your risk, and lowers it. I’m sure you’ve heard the cliché that you can’t put all your eggs in one basket. This wisdom has been […]

The Price to Sales (P/S) Ratio Formula Explained

Price to Sales (“P/S”) is one of the more common and simple relative valuation ratios used to generally compare how expensive or cheap a stock is compared to its peers. The price to sales ratio formula itself is simple, it is Price (Market Cap) divided by Sales (Revenue). The reason we use Market Capitalization for […]

Shark Tank Valuation Formulas Explained

Shark Tank is a wildly popular show with star investing tycoons like Mark Cuban and “Mr. Wonderful” Kevin O’Leary. If you’re an entrepreneur about to pitch your company to these venture capitalists, you absolutely must know your stuff, especially your numbers. The name of the game in Shark Tank is valuation, and if you watch […]

Net Debt to EBITDA Guide: Risks, Valuation, Examples, and S&P 500 Data

Of the many ratios to measure risk with a particular stock, the Net Debt to EBITDA ratio is one of the more common you’ll see listed in company financials. The logic is simple, and the ratio isn’t terribly complex, so I’ll show you how to easily source it in this post. Feel free to skip […]

How to Use Net Tangible Assets from a Company’s Balance Sheet

Net tangible assets can be a very useful metric for evaluating a company’s future profitability, especially in capital intensive industries. In this blog post, I’ll explain the basics behind net tangible assets and include a few easy and practical metrics for it. We’ll break it up into these simple parts [Click to Skip Ahead]: What […]

The Basics of Computer Software Depreciation – Common Q’s Answered

Some parts of GAAP accounting rules can be more tricky, and software and how it is depreciated can be one of those. Most software is depreciated over a useful life, but there can be a type of software which is not depreciated (if it is considered R&D software). First let’s talk about depreciation and amortization, […]

Beginner’s Guide: What is the P/B Ratio in the Stock Market?

The P/B, or Price to Book Value Ratio, compares a company’s book value with its price in the stock market. Book Value, also called Shareholders’ Equity, is simply a company’s assets minus their liabilities. Book value is not usually explicitly referred to in a company’s financial statements, but is commonly known as another term for […]