9 Industries That Thrive During a Recession
Today’s economy operates differently from past recessions. The Great Depression, for example, hit at a time when the primary means of transportation were trains and steamships. Today, in contrast, we have planes and cars as the primary means of transportation. While recessions tend to shake things up for a while until things get back on […]
BVPS: How Valuable is it to Know the True Value of a Stock?
The book value per share (BVPS) ratio compares stockholders’ equity to the total number of outstanding shares. In other words, this calculates a company’s per-share total assets less total liabilities. Value investors have traditionally embraced book value per share as a method of valuing different investments. Benjamin Graham, the founder of value investing, developed what […]
Stock Buying Checklist: Essential Part of Evaluating Stocks (Example Checklist)
The stock buying checklist is one of the essential tools to any investor, in my opinion, and to most, an underutilized tool. Using a checklist is a fantastic way to learn from your mistakes, plus it can help you standardize your investment process by building on your experience and what you observe throughout your career. […]
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 […]
Understanding the Disadvantages of Debt, and Everything Else You Need to Know
There are plenty of disadvantages of debt, but more importantly, you need to fully understand the different types of debt to get the full picture. I’ll cover both topics. Unfortunately, debt is one of those things that is just a part of life. No matter how good of a job you have or how well […]
Understanding How to Utilize an LLC for an Investment Property
If you decide to take your investments to the next level and consider real estate, you should really understand the ins and outs of starting an LLC. If you are like me, you started your investment career off small. You started a brokerage account and began to buy a small number of shares. You then […]
What is a Good P/E Ratio?
The Price to Earnings, or P/E ratio, is one of the most basic ways to try and figure out if a stock is generally cheap. The logic behind the P/E ratio is quite simple. The equation for the P/E ratio is simply Price / Earnings. A low P/E is generally considered better than a high […]
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. […]
Types of For Sale Securities and Their Accounting Treatment (AFS/HTM/HFT)
Updated 12/19/2023 Have you wondered what all those assets on an insurance company’s balance sheet were? Or why do companies carry such a large mix of marketable securities? Did you know that Microsoft owns over $120 billion in short-term investments, over 70% of its current assets, and over 39% of its total assets? That is […]
[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 – […]
