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 Read more about Why a 15 P/E Ratio Represents Fair Value for Most (not all) Companies: FedEx Part 2[…]
Introduction In part 1 of this five-part series, I covered what I considered the 6 most expensive stocks in the Dow Jones Industrial Average Index of 30 stocks. With this part 2, I’m going to cover 6 additional Dow stocks that I consider overvalued currently. So far, these two articles represent approximately 40% of the Read more about 6 More Expensive Stocks in the Dow Jones Industrial Average: Part 2 of 5[…]
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 Read more about The Most Important Stock Investment Lesson I Ever Learned[…]
After such an extended bull run it’s only logical to assume that many stocks are trading at frothy valuations. On the other hand, it’s also important to keep in mind that it is a market of stocks and not a stock market. Nevertheless, the truth is that many stocks are now significantly overvalued based on both historic norms and fundamental values. This is not true of all stocks, because it is also true that there are high quality stocks available today that are fairly valued. However, they are admittedly getting more difficult to find.
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, much of what is offered is merely based on the opinion of the author. This presents quite a challenge to the prudent prospective investor seeking sound advice or guidance. The recommendations are presented and it is left up to the individual to act on the advice or not based on the content as written. […]
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 fallen. That is not to say that bad times never come, because they most assuredly do. However, even during bad times optimism has served investors better than pessimism. The rational optimist recognizes that bad times are only temporary, and better times are sure to follow. […]
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 in love with a great company that you can’t resist investing in the stock even when the valuation is extreme.
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 beliefs in lieu of the facts.
Introduction Chuck Carnevale My biggest pet peeve regarding common stock investing is how so many people have a tendency to over-generalize this asset class. Commonly held beliefs such as investing in stocks is risky, or that the stock market is overvalued, or that the fed is driving stock prices, etc., are just a few examples Read more about Stocks for 2014: Something for Everyone: Part 1[…]
Introduction – The Volatility Is Risk Myth If you were to take the essence of most people’s beliefs and understanding about investing in common stocks, or the stock market for that matter, and turn it into a movie, I believe it would have to be labeled under the category science fiction. In other words, in Read more about Own These World’s Leading Brands And Never Fear A Recession Again[…]