Earnings Determine Stock Price

This week’s blog is dedicated to illustrating the undeniable long-term relationship between earnings and market price. Valuation plays an important role. However, over time, the importance of earnings is clear. In the short run, volatility will always be evident. Prices may not perfectly correlate to earnings over short periods. Eventually though they will. Knowing this Read more about Earnings Determine Stock Price[…]

How Sweet is It?

Today’s blog looks at a well-known, but average growing company – Hershey. Once again, we see the strong relationship between the rate of change of earnings and shareholder returns. Today’s video looks at Hershey based on fundamentals. Best when viewed in full youtube screen. When you pay attention to fundamentals, you can develop an enlightened Read more about How Sweet is It?[…]

Electronic Arts – a Game Play

Electronic Arts paints a very unusual fundamental long-term graph. Many are surprised by the cyclicality this company displays. From fiscal 1991-2000, Electronic Arts was a growth stock. However, since fiscal 2000 it matured into a more cyclical enterprise. Today’s video looks at Electronic Arts first over its growth years, then over its more cyclical period. Note Read more about Electronic Arts – a Game Play[…]

Price Can Lie!

Warren Buffett once lamented: “For some reason, people take their cues from price action rather than from values.”Then he later added: “The dumbest reason in the world to buy a stock is because it’s going up.” Warren was trying to teach us to focus on intrinsic value, rather than current market value. Today’s video separates value Read more about Price Can Lie![…]

Definition of Appreciation

My favorite definition of appreciation is when others appreciate what you have more than you do. This is how shrewd investors find bargains. Warren Buffett once said, “You can’t buy what’s popular and expect to do well.” Today’s video looks at valuation from the perspective of undervaluation. Best when viewed in full youtube screen. Disclosure: Author Read more about Definition of Appreciation[…]

The Great Predictor – Valuation

Of all investment indicators, valuation is, in my opinion, the most predictive. True value, within a reasonable degree of accuracy can be calculated. Once done you can overlay price on earnings in order to forecast both return and the risk taken to achieve it. Today’s video will look at four iterations of overvaluation and reveal the Read more about The Great Predictor – Valuation[…]