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Archive for April, 2018


Why Invest in Tesla When It Keeps Losing Money?

Profitable investing comes from picking investments that have a future. The concept of intrinsic stock value is based on projected future cash flow. As we follow our investments and pick others an important thing to watch is company earnings. Obviously, you want your investments to be showing a profit, even growth stocks and other investments with potential for the future. But what if earnings are simply not that good? A case in point is the electric car maker, Tesla. Why invest in Tesla if it keeps losing money?
Earnings reports are due and The Street says it is do or die […]

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Should You Invest in a Bear Market?

The bear market that people have been predicting for years may have actually arrived. Market Watch is writing about a big bear market of several months duration.
The “big bear market” for stocks that market timer Tom McClellan has been expecting appears to have begun, as Tuesday’s broad selloff turned a key technical indicator down from an already negative position to convey a “promise” of lower lows.
McClellan, publisher of the McClellan Market Report, said there could be a pause in the downtrend this week, as his market-timing signals point to a minor top due on Friday. But with his “price oscillator” […]

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What Can You Do to Avoid Confusion about Investments?

The bull market is getting old. Should you sell? Some of the tech stocks still have good earnings. That implies a good intrinsic stock value. Should you buy when stock prices fall? Interest rates are edging up. Is that bad for stocks? What can you do to avoid confusion about investments? We wrote about the risk of higher interest rates three years ago.
The cost of doing business (borrowing) is about to go up for companies that can least afford it. The expectation that stocks with speculative credit ratings will outperform blue chips seems to be going away as blue chips […]

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Soft Underbelly of Bull Market Is Too Much Debt

According to Warren Buffett the first rule of successful investing in not to lose money and the second rule is not to forget the first rule. With this sage advice in mind, what are the risks in today’s aging stock rally, both in the USA and abroad? Our considered opinion is that the soft underbelly of the bull market is too much debt. This debt excess includes that held by consumers, governments, and businesses.
Business Debt and Margin of Safety
When Steve Jobs came back to Apple he reinvigorated the company and generated lots of profits. He also built up a huge […]

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Where Should You Invest Your Tax Refund?

Are you getting money back on your taxes this year? If so, are you taking a trip, going on a shopping spree, or hopefully putting something away for retirement or a rainy day? If you are taking the latter course where should you invest your tax refund? Investing excess cash such as a tax refund should be routine for every investor. This money will stay put until you are no longer working or when you really need it. Here is where you need to apply the principles of value investing. Intrinsic value is the valuation that successful long term investors […]

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How Are Volatility and Risk Related in an Investment?

The stock market is very volatile this year. In fact, we have not seen this much volatility since the days running up to the financial crisis that ushered in the Great Recession. Investors and traders seem to be of two minds. First, many are worried and are getting out of investments that have been very profitable over the last few years. Second, many see the market correction as an opportunity to buy and gain profits, at least in the short term. Who is right and how should you proceed in the face of increasing volatility? In this regard, how are […]

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What Are the Most Profitable Investments?

The stock market has had a good run and the real estate market has largely recovered from the damage of the Great Recession. But the stock market is flirting with a correction and who knows how long real estate prices will stay up. What are the most profitable investment today and going forward? Our focus here is long term appreciation of your net assets and not on a short term uptick in stock prices. Last year we looked at value investing in our article How many Years Are Required to Make an Investment Long Term?
People like Warren Buffett have made […]

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Are There Any Safe Investment Niches Today?

The long expected Trump trade war is beginning and the markets are barely containing their anxiety. Both the Dow Jones and the S&P 500 are down for the month. As we wrote our article about should you buy gold today, the S&P 500 had its worst 2nd quarter opening in 89 years. That was the year of the crash that ushered in the Great Depression.
The markets have continued trending upward despite seeming to be overpriced. That is because earnings keep increasing. But, what happens in a trade war is that earnings take a big hit. CNBC talks about a bear […]

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Why You Might Want to Buy Gold Today

As the trade war with China begins and the dollar continues its decline, gold is going up in price. At this moment an ounce of gold is worth $1338. GoldPrice.org shows us how gold has done against the dollar in the last minutes, hours, days, months and years in this chart.

Obviously gold is going up in price as the Chinese slap tariffs on pork, fruit, and ethanol in retaliation for US tariffs on steel and aluminum. The Trump administration is looking at tariffs on Chinese tech products and the long-feared trade war is probably upon us. Add the economic damage […]

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