Is The Increase In Volatility Signaling A Dangerous Market Environment?

Introduction

Over the last several weeks stock price volatility has increased significantly above norms.  All of a sudden it is not uncommon to see stock prices moving 5%, 10% or more in a single trading day.  Interestingly, this volatility is occurring both to the upside and the downside.  Common sense would suggest that the intrinsic value of a business cannot change by those orders of magnitude from one day to the next.  Logic dictates that the market is either inaccurately pricing the stocks now or it was incorrectly pricing them yesterday. […]

Please follow and like us:

Why I Am Now Interested In CVS Health Corporation

Introduction

Investing in great companies sits at the core of my investment philosophy.  In this regard, I reject the idea that I invest in the stock market.  To me, the stock market is simply the store I shop in to purchase interests in fine businesses.  In the final analysis, my investment objective is to become a long-term shareholder/partner in a business that I believe can make me money over time. […]

Please follow and like us:

What Is The Correct Discount Rate To Use? Part 2B

Introduction One of the most widely-accepted and utilized methods of valuing a business in today’s world of modern finance is discounted cash flow (DCF) analysis.  Obviously, in order to calculate valuation, practitioners must rely on mathematical formulas.  However, the challenge with utilizing mathematical formulas to determine the net present value (NPV) of a future stream[…]

CVS Caremark Corp: A Healthy Option for an Aging Population

CVS Caremark (CVS) is one of the leading pharmacy healthcare providers in the United States.  There have been major changes due to significant merger and acquisition activity within the pharmacy benefit management industry that stands to benefit CVS.  This high-quality healthcare juggernaut is currently trading at a historically attractive valuation.  Therefore, we feel it represents[…]