The Practical, Ideal Holding Period for the Average Investor Explained
Warren Buffett once said, “our favorite holding period is forever”. But is that really true? Should investors plan to hold every stock they buy, forever? Can investors pick the stocks that beat the market, and hold them forever? How many stocks actually beat the market “forever”? These are all questions we will try to answer […]
Guide to Terminal Value, Using The Gordon Growth Model
When we buy a company, we dream that the company’s high growth rate will live on forever. Unfortunately, that is not a reality unless you are Amazon. For the rest of us, facing that reality means utilizing a terminal value with the Gordon growth model as our best means to an end. Did you know […]
Graham Formula: Taking a Look at the Way Benjamin Graham Values Stocks
Updated 6/4/2024 “Using precise numbers is, in fact, foolish; working with a range of possibilities is a better approach.” Warren Buffett Warren Buffett shares much of his investing wisdom in his annual letters to shareholders, including his thoughts on calculating intrinsic value. His favorite analogy is the Aesop fable, which states that a bird in […]
Using Porter’s Five Forces to Determine a Company’s Moat
Updated 6/3/2024 “The key to investing is not assessing how much an industry will affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.” Warren Buffett Investing in companies whose competitive landscape we don’t understand offers some challenges; we […]
Shark Tank Valuation Formulas Explained: What Stock Market Investors Can Learn
Post Updated: 7/12/2023 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 […]
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Simple Balance Sheet Structure Breakdown (by Each Component)
Updated 6/3/2024 “Never invest in a company without understanding its finances. The biggest losses in stocks come from companies with poor balance sheets.” Peter Lynch The ability to read a company’s financials, such as the income statement, balance sheets, and cash flow statement, is a key data source for investors, both do-it-yourselfers and institutional investors. […]
The Cash Back on Gas App: Free to Use Because Gas Stations Want Your Money
With gas prices on the rise, you might be looking for relief at the pump. Rather than sift through long lists of gas stations that do cash back in your area, why not try an app that does it daily for you? I’m talking about an app called Upside. When you first sign up for […]
[S&P 500] Average Valuation Multiples by Industry: P/E, P/FCF, P/S, P/B, PEG
There are many valuation multiples which investors use to compare stocks with their peers in an industry. This post displays the mostly commonly used valuation multiples, showing average multiples of the S&P 500 by both sector and industry for Fiscal Year 2021 and 2020, as well as the 19 or 20-year historical averages (2002 – […]
Easy Ways to Reduce Investment Risk and Still Make Money
Just because you are afraid of losing money doesn’t mean you should be investing now. Here are some easy tips to get a strong return and reduce investment risk. Just 20 years ago, it felt like the working class was focused on 401K plans and gaining interest in savings accounts. Now, with the new world […]
