What are Selling, General, & Administrative Expenses?

In the tech world, SG&A costs occupy a large part of the company’s costs. For many companies, these costs will inevitably occupy a high cost on the income statement. The higher expenses make sense if we think about it a little. Because a company like Crowdstrike sells software as a service, the creators (people) of […]

What are Cost of Goods Sold and What’s Included in it?

Controlling costs remains one of the more important jobs of management. They must control the costs of producing revenues, which reflect their profits. One of the best ways to control costs is to ensure the costs of goods sold remain under control. As companies expand, sometimes these costs grow, as seen by Google and Microsoft. […]

What is a Good Number of Stocks to Own?

The number of stocks in a portfolio can have a major influence on your ultimate results as an investor. Because of this, every investor must answer the question: what is a good number of stocks to own? The short answer is that there is no right answer. The much longer answer is that it depends […]

The Meaning of “Fish Where the Fish Are” in Investing

“Fish where the fish are” is a quote by famous investor Charlie Munger to explain the art of value investing. All investors want to buy low, sell high. They want to buy a stock, and sell it some day at a higher price. Taken to the extreme, this core idea represents what value investing is […]

The Top Down Investing Strategy: Pros, Cons, Pitfalls, and a Hybrid Approach

Fundamental investing can take two paths: “bottom up,” or “top down.” One style of evaluating stocks is not better than the other. In fact, there are different types of both bottom up and top down investing within those main camps. And finally, there’s nothing stating that an investor needs to be either top down or […]

Understanding the Importance of Revenue Recognition Policy

“It’s easier to fool people than to convince them that they have been fooled.” -Mark Twain Understanding a company’s revenue streams and how they generate them remain important parts of analyzing companies. A company’s revenue recognition policy will help investors understand how and when they generate revenue. Each business operates from a different business model. […]

How Does PayPal Make Money?

“What an investor needs is the ability to correctly evaluate selected businesses. Note that word ‘selected’: You don’t have to be an expert on every company or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, […]

What Kind of Investor Are You? How to Find Investment Ideas

Finding good investment ideas can be difficult, regardless of whether you are a seasoned investor or Warren Buffett. To assist you in finding the next hot stock, a seemingly limitless variety of financial services firms make grand claims. And everyone has that one overly enthusiastic neighbor or cousin constantly pushing the “next big thing.” Avoid […]

Active and Passive Portfolio Management: Pros and Cons [for Average Investors]

There are two major ways to manage an investment portfolio. Active portfolio management means actively buying and selling stocks regularly. Passive portfolio management means passively buying and holding stocks, without much activity. Average investors can also take an active or passive approach. An investor could do passive portfolio management, on a personal level, by hiring […]

The 3 Main Elements of Patient Investing

These reasons are due to the nature of the stock market. Many smart people have observed these for many decades. Patient investing makes for an easy catch phrase: “Slow and steady wins the race.” “The tortoise beats the hare.” But being truly patient when it comes to the stock market is much harder than it […]