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@thevalueway

The Value Way

thevalueway

💸Value Investing Principles 📣Quotes 🌟Inspiration 💡Financial Terms 📈Analysis 🗓Economic Calendar 📰News

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Criteria for picking stocks.🔍 ~ Earnings stability.  According to Morgan Stanley 86% of all the companies in the S&P500 index have had positive earnings in every year from 1993 through 2002. So Graham's insistence on "some earnings for the common stock in each of the past ten years" remains a valid test-tough enough to eliminate chronic losers, but not so restrictive as to limit your choices to an unrealistically small sample. #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
Benjamin Graham's criteria for picking stocks.🔍 ~ Strong financial condition. ~  According to market strategists Steve Galbraith and Jay Lasus or Morgan Stanley, at the beginning of 2003 about 120 of the companies in the S&P500 index with Graham's tost of a 2-to-1 current ratio. With current assets at least their current liabilitios, those firms had a sizeable cushion of working capital that should be sustained through hard times.  The lesson here is not that these stocks were "a sure thing," or that you should rush out and buy everything (or anything) in this table." Instead, you should realize that a defensive investor can always prosper by looking patiently and calmly through the wreckage of a bear market. Graham's criterion of financial strength still works: If you build a diversified basket of stocks whose current assets are at least double their current liabilities, and whose long-term debt does not exceed working capital, you should end up with a group of conservatively financed companies with plenty of staying power. The best values today are often found in the stocks that were once hot and have since gone cold. Throughout history, such stocks have often provided the margin of safety that a defensive investor demands. #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
Benjamin Graham's criteria for picking stocks.🔍 ~ Adequate size.🏭 ~  Nowadays, "to exclude small companies," most defensive investors should steer clear of stocks with a total market value of less than $ 2 billion. In early 2003, that left you with 437 of the companies in the Standard & Poor's 500-stock index to choose from. However, today's defensive investors unlike those in Graham's days can own small companies by buying a mutual fund specialization in small stocks. Again, an index fund like Vanguard Small-Cap Index is the first choice, although active funds are available from Ariel, Rowe Price, Royce, and Third Avenue.  #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
Purchase of Bargain Issues.💱 ~  We define bargain as one which is basically established by analysis, appears to be worth considerably more than it is selling for. The genus includes bonds and preferred stocks selling well under par, as well as common stocks. To be as concrete as possible, let us suggest that an issue is not true "bargain" unless the indicated value is at least 50% more than the price. What kind of facts would warrant the conclusion that a discrepancy exists? How do bargains come into existence, and how does the investor profit from them? There are two tests with a bargain common stock. The first is by the method or appraisal. This relies largely on estimating future earnings and then multiplying these by a factor appropriate to the particular issue. If the resultant value is sufficiently above the market price and if the investor has confidence in the technique he can tag the stock as a bargain. The second test is the value of the business to a private owner. This value is also determined chiefly by expected future earnings in which the results may be identical with the first. But in the second test more attention is needed to the realizable value of the assets, with particular emphasis on current assets or working capital. #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
Portfolio Policy for the Enterprising Investor: The Positive Side.👍 ~ The Relatively Unpopular Large Company: If we assume that it is the market of overvalued stocks that have excellent growth or are glamorous for some other reason, it is logical to expect that it has undervalued stocks, at least companies that are out of favor because of unsatisfactory developments or a temporary nature. The key requirement here is that the investor is investing in the investment market. While small companies may also be undervalued for similar reasons, and in many cases may increase their earnings and share price, they are the risk of a definitive loss of profitability and also of negligence in the market in spite of better earnings. The large companies have a double advantage over the others. First, they have the resources in capital and brain power to carry them through advertising and back to a satisfactory earnings base. Second, the market is likely to respond with reasonable speed to any improvement  #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
YOUR MONEY AND YOUR BRAIN 🧠 Why, then, do investors find the market so seductive? It turns out that our brains are hardwired to get us into investing trouble; humans pattern-seeking animals. Psychologists have shown that if you are present with a random sequence and tell them that it's unprecedented they will never insist on what's coming next. Likewise, we "know" that a baseball player is due for a base hit, that the next winning song in the Powerball lottery will definitely be 4-27-9-16- 42-10-and that this is a little bit new is the next Microsoft.  Groundbreaking new research in neuroscience shows that our brains are designed to know where they might not exist. After an event occurs just two or three times in a row, regions of the human brain called the anterior cingulate and nucleus accumbens automatically anticipate that it will happen again. It does repeat, a natural chemical called dopamine is released, flooding your brain with a soft euphoria. Thus, if a stock goes up a few times in a row, you reflexively expect it to keep going and your brain chemistry changes the stock rises, giving you a "natural high." You become addicted to your own predictions. But when stocks drop, that financial loss fires up your amygdala part of the brain that fights and fears and generates the famous "fight or flight" response that is common to all cornered animals. Just as you can not keep your heart rate rising from a fire alarm goes off, you can not avoid flinching if a rattlesnake slithers on your hiking path, you can not help feeling tearful when stock prices are plunging.  #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
Financial Calendar Week 18.🗓 Watchlist.👀 - Office Depot - Altice #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
Factors affecting the Capitalization Rate💸 ~  Current Dividend Rate.  This, the last additional factor, is the most difficult one to deal with in fashion. Fortunately the majority of companies have a standard dividend policy. This has been the distribution of two-thirds of their average earnings, except that in the recent period of high profits and inflationary demands. (In 1969 it was 59.5% for the stocks in the Dow Jones average, and 55% for all American corporations.) Where the dividend is a normal relationship to the earnings, the valuation may be made on the basis without substantially affecting the result. For example, a typical secondary income or expected dividend of $ 2 may be valued at either 12 times its earnings or 18 times its dividend, or a value of 36 in both cases. However, an increasing number of growth companies are 60% or more of earnings in dividends, on the grounds of the shareholders' interests will be better served by the profits of finance expansion. The issue presents problems and requires careful distinctions. We have decided to defer our discussion on the issue of the issue of maintenance and / or policy.  #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
Factors affecting the Capitalization Rate💸 ~  Dividend Record  One of the most persuasive tests or high quality is an uninterrupted record of dividend payments going back over many years. We think that a record of continuous payments for the last 20 years or more is an important factor in the company's quality rating. Indeed the defensive investor might be justified in limiting his purchasing to this meeting this test. #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
Factors affecting the Capitalization Rate.💸 ~  Financial Strength and Capital Structure:  Stock of a company with a lot of cash and cash and nothing else is better than that of earnings at the same price. Such factors are properly and carefully performed in account by security analysts. A modest amount of bonds or preferred stock, however, is not necessarily a disadvantage to the common, nor is the moderate use of seasonal bank credit. (Incidentally, a top-heavy structure too little common stock in relation to bonds and preferred may under favorable conditions make for a huge profitable profit in the common.This is the factor known as "leverage.") #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
Factors affecting the Capitalization Rate.💸 ~ Management.  On Wall Street a great deal is constantly said on this subject, but little that is really helpful. Until objective, quantitative, and fairly reliable managerial competence are devised and applied, this factor will continue at a fog. It is fair to assume that an outstandingly successful company has unusually good management. This will have shown itself already in the past record; it will show up again in the estates for the next five years, and once more in the previously discussed factor or long-term prospects. The tendency to count it still as a separate bullish consideration can easily lead to expensive overvaluations. Management factor is most useful, we think, in those cases in which a recent change has taken place that has not yet had its significance in the actual figures. #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
🗓 Financial Calendar Week 17.🗓 Watchlist.👇 - Snap Inc. - Kraft Heinz - Aon - Berkshire Hathaway #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
Factors affecting the Capitalization Rate.💸 ~ General Long-Term Prospects:  No one really knows anything about what happens in the distant future, but analysts and investors have strong views on the subject just the same. These views are reflected in the earnings differentials of individual companies and of industry groups.  For example, at the end of 1963 the chemical companies in the DJIA were selling at considerably higher multipliers than the oil companies, indicating stronger confidence in the prospects of the former. Such distinctions are often soundly based, when dictated mainly by past performance. ~ #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
Common-Stock Analysis.🔍 ~  The ideal form of common-stock analysis leads to a valuation the issue which is an attractive purchase. This fall, in turn, would ordinarily be found by estimating the average earnings over a period of years in the future and then multiplying that estimate by an appropriate "capitalization factor." The now-standard procedure for estimating future earning power starts with average data for physical volume, prices received, and operating margin. Future sales in dollars are then projected on the basis of assumptions as to the amount of change in volume and price level over the previous base. These estimates, turn, are grounded first general economic forecasts or national product, and then on special calculations applicable to the industry and company in question. ~  #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader
News: Draghi plays down softer eurozone economic data.📰 ~ The European Central Bank made no changes to its statement on Thursday, leaving interest rates unchanged and repeating its promise to keep buying bonds until the end of September, or beyond, if necessary. ECB President Mario Draghi’s new conference will be closely watched for clues to how and when policy makers plan to wind down the bank’s program of quantitative easing. Of particular interest is how Draghi describes softer than expected first quarter eurozone economic data and how that is influencing the ECB’s policy discussions.  #investing #investments #nasdaq #nyse #bull #bear #valueinvesting #warrenbuffet #charliemunger #stocks #price #business #longterm #investor #intelligent #undervalued #qoute #trade #trader

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