Great Businesses v Risky Stocks I believe that successful long-term investing in stocks implies investing in the greatest businesses as you can identify. However, it is important to recognize that there can be a distinction between a great business versus a risky stock. The differentiator, as always, is valuation. You can overpay for even the …
NKE
Why a 15 P/E Ratio Represents Fair Value for Most (not all) Companies: FedEx Part 2
Introduction One of my favorite Warren Buffett quotes is “investing is most intelligent when it is most businesslike.” The reason this quote resonates so much with me is because I believe it represents the essence of value investing. To me, value investing is about positioning yourself as a shareholder/owner/partner in a wonderful business that you …
The Most Important Stock Investment Lesson I Ever Learned
Introduction My investing career officially started in 1970. However, for several years prior to that time I was an avid and interested student of common stock investing. My initial lessons were taught by studying the behavior and practices of the most renowned stock investors. Although these academic pursuits taught me a great deal, nothing taught …
The Best Way to Judge Past Performance: Part Two
Introduction On virtually every financial website on the planet there is a never-ending daily stream of stock tips and recommendations. Consequently, the investing public is literally flooded with information and advice regarding what stock to buy today or not to buy. Some of what is offered is supported by factual information and logic, but unfortunately, …
“Ye Of Little Faith” What Has It Cost You? Part 1
Introduction I believe that one of the most important attributes that a successful investor must possess is optimism. Any serious student of financial history would recognize and acknowledge that economically speaking, things are good much more often than they are bad. In the general sense, common stocks have risen far more often than they have …
Can We Really Trust Nike’s Stock Price?
Introduction One of the most common mistakes that I see common stock investors make is failing to formulate the important distinction between a company and its publicly traded stock. There are many great companies out there with fabulous stories surrounding their wonderful businesses. As a result, it can be very easy to fall so much …
The Shocking Truth About Share Buybacks
Introduction The value and benefits, or lack thereof, of share buybacks to the future fortunes of a company and their shareholders is one of the most hotly debated subjects on popular financial blogs such as Seeking Alpha. Unfortunately, at least based on my own personal experience, most of the arguments are predicated on opinions and …
A True Investor’s Most Important Performance Measurement
Although most people either fail to realize it, or simply refused to accept it, every stock portfolio has two separate and distinct performances. The first, and in my opinion, the least important, is stock price movement. If you buy a stock at $10 a share and it goes to $15 a share it’s a good …
Nike (NKE): Just Do It – Sell
There is an enormous amount of discussion and even controversy regarding various opinions as to whether the stock market is currently undervalued or overvalued. Some pundits, such as Prof. Schiller, use a statistical analysis that argues for overvaluation based on an alleged reversion to the mean. Currently, Prof. Schiller calculates the Schiller PE on the …