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I get a lot of requests for real-world examples or homework assignments that have to do with some of the more important investing concepts. This morning is your lucky day if you’re fairly new to the finance game and want to give diving into SEC filings or annual reports a try. Here’s a (fairly) easy introduction to how things can appear better, or worse, than they really are. Ready? Let’s go.
A college student wrote asking a question involving a conflict he had with one of his professors. The student was right. The professor was wrong.
This is one of those inside-baseball questions that the serious, more-than-part-time investors out there will probably enjoy. Hi, Joshua. I could read your blog all day. Thanks for everything that you do. When I read your commentary on payout ratios, it seems to focus on EPS payout ratio, or dividend coverage. I don’t understand why you don’t…
McDonald’s is one of those businesses that I love. The last time we talked about it was when I wrote the 25 Year Investment Case Study of McDonald’s, and showed how you could have turned $100,000 into anywhere between $1,839,033 and $5,547,089 depending on how you handled dividend reinvestment and the Chipotle split-off back in 2006, and the sorely lacking media coverage of McDonald’s results in February. No matter which way you look at it, despite periods of overvaluation and undervaluation, alternating with the underlying performance and the emotional moods of shareholders, McDonald’s has been a fantastic company. It makes its employees and shareholders a lot of money. It gives society something it wants, whether that be a plain salad with side of fresh fruit and a non-sweetened iced tea or a double cheeseburger with french fries and a Coca-Cola.
A Look At How the Father of Value Investing Calculated the Intrinsic Value of an Ordinary Share of Common Stock Benjamin Graham, the rich investor, professor, and mentor to Warren Buffett, once proposed a quick back-of-the-envelope intrinsic value formula for investors to determine if their stocks were at least somewhat rationally priced. He encouraged investors…
[mainbodyad]As I explained in my investing lesson on how to read an income statement over at About.com, a division of The New York Times, gross profit and the gross profit margin are both important because they determine how much money out of each dollar sold is available for salaries, benefits, advertising, expansion, debt reduction, and…
Whether or not a business can lavish employees and owners with huge bonuses, paychecks, dividend checks, and profits on a sustainable basis depends upon one metric and one metric only: operating profit per employee.
Pension costs and calculations are one of those areas a lot of people don’t think about in their day-to-day lives but it can be really interesting if you love investing and are mathematically inclined. It’s also important as a voter given the political implications should your municipality find itself in a pension funding crisis.
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