Historical S&P 500 Industry Weights – [20+ Year History]
Updated 7/12/2023 If you’re benchmarking to the S&P 500, then it helps to know the context of your industry weighting compared to the index. It can help to explain your portfolio’s relative performance. It can also create a “heat check” to how your portfolio is balanced, and how it might react to an upcoming economic […]
Depreciation and Amortization – A Complete Financial Statements Guide
Updated 8/7/2023 Buying businesses and equipment for operations is a part of business, and using depreciation and amortization is how companies account for those purchases. Many have written about the benefits or harm done by considering depreciation and amortization a “non-cash” expense. Some consider these items non-cash because we add them back to earnings to […]
4 of the Best Value Investing Books Recommended by Top Investors
Updated 6/30/2023 So, you’ve reached the point in your investing career where you’re looking for the best value investing books out there for you to continue on your journey of expanding knowledge…congrats! But come on – hasn’t anyone told you that books are old fashioned and boring? I mean, they’re out of style just as […]
Financial Accounting for Beginners: Debits/Credits, P&L, Assets/Liabilities
Updated 8/7/2023 Recently, Berkshire Hathaway earned $81.4 billion in 2019, a 1,900% increase from the year before! How was this possible, by an accounting rule instituted in 2018 that requires companies to include in their bottom line gains from their stock portfolio, even if they don’t sell the stock. Buffett vehemently disagrees with this accounting […]
Simple Income Statement Structure Breakdown (by Each Component)
Updated 8/7/2023 The income statement is the first of the big three financial documents that all public companies must file. But what do we know about the income statement structure and how the statement flows from the top to the bottom? Have you ever heard the terms top-line or bottom-line? What do those terms mean? […]
Cash Vs. Stock Acquisitions: What’s Driving The Bus?
Updated 7/24/2023 “If you aggregate all of our stock-only mergers (excluding those we did with two affiliated companies, Diversified Retailing and Blue Chip Stamps), you will find that our shareholders are slightly worse off than they would have been had I not done the transactions. Though it hurts me to say it, when I’ve issued […]
What’s a Good Debt to Equity Ratio? The Ultimate Guide for Beginners
The debt to equity ratio is a great formula for investors to use as a rule of thumb for determining the riskiness of a stock, based on its balance sheet. That said, not all companies with a high debt to equity ratio are risky companies; not all companies with a low (or zero) debt to […]
Balance Sheet Item: Book Value of Equity and Its Individual Components
Updated 6/24/2023 “Price is what you pay; value is what you get.” A company’s evaluation involves determining the value of its assets, liabilities, and equity. Most of us are familiar with assets such as accounts receivable and liabilities such as debt. But how many of us understand equity and how to determine the value of […]
Bruce Sherman’s Investment Strategy That Helped Him Beat the Market
From 1991 – 1995, Bruce Sherman achieved what some consider the holy grail of investing. Sherman beat the S&P 500 without taking on more volatility with the portfolio for Private Capital Management. Private Capital Management was ranked by Money Manager Review as the #1 value manager on a risk-adjusted basis over this 5-year period. The […]
Average Gross Profit Margin by Industry – 22 Years of Data [S&P 500]
Updated 4/21/2023 Gross profit margin is one of the three main margin formulas in a company’s income statement, which measures a company’s efficiency in creating profitability. Gross profit margin, or “Gross Margin”, is basically how profitable a product or service is before you account for the operating costs, taxes, and interest payments to run the […]
