The Value Investing Cheat Sheet

Value investing is the investing idea that you can buy a company that is “under-valued” relative to its true value.  The reason that its stock is undervalued relative to its fundamentals could be market movements or other outside trends.  However, you want to make sure that you avoid value traps, which could mean the company [...]

Key Value Stock Fundamentals for Screening Stocks

The hardest part of deciding where to invest is actually deciding what criteria you want to look for in a company. I am a huge value investor, and look for solid companies that can be purchased at a discounted price (maybe due to bad short-term news). The trick to finding these companies is to use a stock screener. Most online brokerages have them, as does Yahoo! Finance or What I highlight below are some key fundamentals you may want to look at when investing in a company. Remember, a number or ratio may look good, but it is important to understand why that number looks good, or if it looks “too” good.

Research The CEO and Board of Directors Of Your Company!

If you’re going to invest in a company, you need to know what the leaders of that company are all about.  Do they have integrity, or have they been investigated for being unscrupulous in the past?  These are important questions, because as a shareholder, you’re essentially trusting the people with your money.  You expect them [...]

Groupon’s Woes Can’t Be Solved by “Friendly” Hedge Funds

Over the past month, shareholders of famed internet deals site Groupon (GRPN) have encountered a wild ride up and down more than 50% as top-performing hedge funds claimed a stake in the company. One of the best performing funds in the last two years, Tiger Global, disclosed it owned 9.9% of the company. Someone close [...]

Betting on Crime: Investing in Private Prisons

One of my (foreign) economics professors always said that Americans are good at two things: gaining weight and human storage. Human storage was referring to the millions of Americans locked behind bars. More than 2.2 million Americans currently call a jail cell their home, and the industry is booming. Thanks to a favorable legal environment [...]

How Shark Tank is Making Me a Better Investor

I’m enjoying the new season of Shark Tank, a reality show where entrepreneurs pitch their businesses to venture capitalists who decide whether or not to invest in a business. The show provides some great investment lessons from very successful business leaders, entrepreneurs, and venture capitalists. Here are just a few reminders that Shark Tank gives [...]

The Easiest Way To Find Great Companies To Invest In

Thinking and finding companies to invest in can be hard.  That’s why I wanted to share with you the best way to find great companies that you can invest in right now.  It doesn’t require diligent research; it doesn’t require vast investment knowledge; and it doesn’t require any special skills.  All it requires is a [...]

Reader Question: What is the Difference Between a Roth IRA and an ETF?

As long as you keep sending me questions, I’ll do my best to answer them each week (if you’re comfortable letting me).  You can ask a question here. This week’s question comes from Solomon, who was wondering what the difference is between a Roth IRA and an ETF…check it out:   The Question I have [...]

6 Tips to Find Safe Insurance Stocks

In light of all that is happening on the east coast, it might be time to turn our attention to the insurance industry. Like utilities, insurance companies have been a place of safety for investors. They are big, profitable cash cows that usually pay very good dividends.   Why Invest in Insurance Companies Insurance companies [...]

CarMax Should Lead Used Auto Sales Recovery

This week’s bullish case for CarMax in Barron’s encouraged me to reopen a CarMax annual report that had been gathering dust on my desk. As the Barron’s article says, CarMax is a differentiated retailer in a very commoditized space – used car sales. Let’s dig deeper into CarMax’s business model to determine whether or not [...]

The Case for Investing In Local Stocks

A theory is something that is not proven true, but backed by continuous testing and supporting evidence. In finance, no theory is tested more than the theory of efficient markets – that is, all known information is always priced into a particular security. Researchers have an incredible interest in the idea of informational asymmetry, the [...]

Can Weyerhaeuser’s Timber Propel it to New Heights?

Timber prices run hot and cold, but for right now, the timber trade is absolutely on. This year, Weyerhaeuser Company (WY) –the largest company in the timber business – has logged an impressive 40% return. Can Weyerhaeuser ride the waves in timber to a record valuation?   What Drives Weyerhaeuser Weyerhaeuser is much larger than [...]

What Was Your Best Investing Day Ever?

I think it is always fun to share awesome investing stories, and I wanted to share mine.  There aren’t a lot of great deals right now, so I’ve been spending most of my time reminiscing over past trades that have worked out well.  Here is the story of my best trade ever (it’s actually two trades), and [...]