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Posts Tagged ‘intrinsic stock value’


How to Spot a Value Trap Investment

Over the years we have often cautioned investors to beware of penny stocks, especially those that have seen better days. While investing in a grand old name in hopes of a recovery it is important to learn how to spot a value trap investment. This issue came up recently when we wondered what was wrong at Kraft Heinz. As bargains become harder to find in an aging bull market there is a temptation to go bottom feeding in search of an investment miracle. Here is some advice about what to watch out for.
 
Kraft Heinz Products
 
Spotting a Value Trap
A couple of […]

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When Are Cheap Investments the Best Investments?

A couple of years ago we wrote to beware of penny stocks. The point being that cheap investments are not necessarily good investments. After all, there is probably a good reason why a stock is selling for a low price. On the other hand, companies that are just starting out and are not being watched by Wall Street analysts may be very promising but no one is watching. The bottom line for stock value (as opposed to price) is intrinsic stock value. When you have unique insights about the stock in question and the big guys are not watching, you […]

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Choosing Deep Value Investments

Many investors are pessimistic about the prospects of their investments in the coming year. In this regard we are looking at the process of choosing deep value investments. We see the pessimism in that stocks are rising on tepid earnings reports as The New York Times reports.
Late last month, chip giant Advanced Micro Devices reported disappointing financial results for the fourth quarter and warned that its first quarter performance would be weaker than expected. The stock surged 20 percent. A couple of days later, General Electric reported one of its skimpiest quarterly profits of the century, badly missing analysts’ forecasts. […]

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Why Does Dividend Growth Investing Work So Well?

Among the more successful approaches to long term investing, dividend stocks provide a steady income stream as well as the ability to reinvest without paying fees. When evaluating dividend stocks to add to their portfolios, wise investors look for a long history of continual dividend payments and a steady stream of dividend increases. When you use this approach as your guide, it is referred to as dividend growth investing. Why does dividend growth investing work so well? Here are some thoughts on the subject.
Why Does Dividend Growth Investing Work So Well?
We have three simple answers to this question. They have […]

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How Much Will Your Investments Be Worth in One, Five, and Ten Years?

Investors are concerned today as the market corrects, the trade war threatens to be long term, the Trump tax cut effects are wearing off, and earnings are taking a hit. But, one needs to put things in perspective when looking at long term investing. When making investment decisions, ask yourself how much will your investments be worth in one, five, and ten years.
Stock Market Investment Perspective
The New York Times has an interesting article in this respect. Despite recent losses, stocks are riding high when you look at the longer term.
Lately, the markets have been rattled about the prospect that a […]

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How Does Algorithmic Trading Affect Your Investments?

The US stock market just experienced one of its more impressive down days ever, with the S&P 500 losing 783 points out of 27,782. This was not the worst percentage drop ever but it vied for the most points of the S&P 500 lost in one day. There are lots of valid concerns about the longevity of the current bull market such as an uncertain trade war, rising interest rates, and tepid earnings. However, much of the blame for the one-day drop in the market is being placed on trading algorithms that control roughly 80% of daily stock trading. That […]

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How Do You Choose an Investment to Hold for Five Years?

The stock market goes up and down and the business news reports every daily gain and loss as though it were a prediction for permanent success, or long term dismal failure. Pundits have likened the reporting of the stock market to an old-fashioned melodrama. Nellie is tied to the railway tracks. Will the hero get there on time? But, he is delayed. But, maybe she will get loose. Maybe the train will stop. However, agonizing over the daily fluctuations of the market is not really the best way to pick a longer term investment. Many successful investors only invest for […]

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What Is the Most Profitable Way to Invest Your Money?

At any given moment in time, some investments are making money and others are losing money. Too many investors buy in a bull market, only to see their investments decline as the bears take over. Successful investors are either very good at market timing, or dedicated to long term value investing based on intrinsic investment value. What is the most profitable way to invest your money?
How to Pick Winners
There are investments that we wish we had made. Microsoft today is a huge and stable company with a nice dividend. Anyone who bought it when the company went public thirty years […]

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How Do You Choose an Investment to Buy and Hold?

The richest people in the world started successful companies or bought into them. And these people retain ownership over the years. You may be too late to found Microsoft, Walmart, Amazon.com, or Berkshire Hathaway but you can follow the examples of these folks. Buy and hold value investing, when you choose the right investments, results in profits that continue for years and years. Why does this approach work? And, how to do you choose an investment to buy and hold?
How Do You Choose an Investment to Buy and Hold: Why Does This Work?
We like the Warren Buffett quote that the […]

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Treat Your Investments Like a Cash Machine and Not a Slot Machine

How do you make money with your investments? There are two basic strategies. One is to pick a solid investment based on strong intrinsic value and hold for the long term. The other is always to follow the old adage to buy low and sell high. The first approach assumes that timing the market is difficult and not worth the risk. The second approach uses a lot of technical analysis in an attempt to time the market. Our suggestion is that for the long haul you should follow the first approach for the majority of your investments. You should treat […]

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