Google search “Financial Report of the United States”’ and it pulls up the US government’s financial statements. The recent year’s balance sheet which as of September year end 2020 reports a net negative financial position of $26 trillion dollars (it’s higher today). Basically, this is negative equity. Usually this would point to bankruptcy, yet since … Read more
The media is always trying to get the attention of readers and investors. The biggest challenge for an investor is wondering if the investment they’ve made is a good or a bad choice, and how long they should hold the investment. A simple media report or opinion can cause an investor to sell out of … Read more
Investment returns are generally compared against benchmarks to gauge performance. Yet, yesterday’s big gainer is rarely tomorrow’s winner, and comparison against a benchmark can do more harm than good. Whether its with indexing or individual equities setting up a plan, and ignoring the noise can be important for multiple reasons. A long term focus will … Read more
The other day, my son, who is twelve, was talking conceptually about traders buying or selling a stock. In this case, he was referring to a share of Berkshire Hathaway A shares which trades over $370,000 per share as of this writing. He was wondering how hard it would be for traders to sell a … Read more
Vilfredo Pareto, an Italian economist, civil engineer, and socialist, in 1906 made the observation that within Italy 80% of real estate was owned by 20% of the population. Pareto discovered that this phenomena expanded beyond Italy’s borders occurring in neighboring countries as well. In later years this research by Pareto was used by Joseph Juran … Read more
Index investing has been a hot topic for investors. Most fund managers rarely beat their benchmark index, so investing with the index seems like the best route to take for those not interested in doing the investment research work. Today, indexing has gotten so large that there are some concerns rising to the top that … Read more
Bull markets or long term upward price appreciation are the golden child. They reflect the recoveries and expansions of the economic world. Economic recoveries and growth push spending and investment forward and compound. The simple act of spending and investing creates more of the same like that of an ant discovering a food source and … Read more
Trends and reversions or regressions to the mean are directional concepts within the stock market. Understanding trends and reversions and how to make them work for you as an investor can be important. A trend is a directional movement of some type that takes time to develop, yet continues until saturation of the trend occurs … Read more
Within the investment research process you have to turn over a lot of stones to uncover as much as you can about the company you are interested in owning. Every piece of information matters. As it is hard to discover everything, leaving one stone uncovered can fail to reveal the one piece of the puzzle … Read more
Business growth generates ownership or shareholder value which ultimately translates into investment growth. In order to find businesses that are growing you have to understand the basics of business growth. The simplest way to understand this topic is by example. Imagine someone is passionate about the widget business, and wants to start a widget business. … Read more