One of the tenets of Benjamin Graham, the father of value investing and Warren Buffett's mentor, was "margin of safety". Conditions may arise in the market place where the price of a security may be purchased at a price less than even a cautious estimate of it's intrinsic value. The greater this disparity becomes then ...
Every company games the numbers to a certain extent to achieve budget and get bonuses. This is nothing new. But two things make the here and now different for us. First, our money is the issue (history is always about other people's money). Second, these are BIG numbers. Enron, Aldelphia and WorldCom are extreme ...
There is nothing inherently wrong with short selling, which is permissible under the regulations of the Securities & Exchange Commission (SEC). But the short-and-distort type of short seller uses misinformation and a bear market to manipulate stocks. Short and distort is as illegal as the pump and dump, but is mainly used in a bear ...
There tends to be a lot of talk about "investor capitulation" when stocks continue to tank. But what is meant by capitulation in Wall Street terms and what does it mean for future stock trends? This article will discuss both. Capitulation is defined in the American Heritage Dictionary as the following: capitulation (n) 1. The act of surrendering ...
In the Stock Market, the bulls and bears are in a constant struggle. If you haven't heard of these terms already, you undoubtedly will as you begin to invest. The Bulls A bull market is when everything in the economy is great, people are finding jobs, GDP is growing, and stocks are rising. Things are just plain ...
When times are tough in the market, companies will often announce stock buyback programs. Why would a company want to buy back its own shares? What does this mean for shareholders? Buyback Basics A stock buyback, also known as a "share repurchase", is a company's plan to buy back its own shares from the marketplace. You can ...
Think of being on a Ferris wheel: one minute you're on top of the world, the next you're at the bottom - and eager to head back up again. Investing in cyclical companies is much the same, except the the time it takes to go up and down, known as a business cycle, can last ...
The PEG (price/earnings to growth) ratio is a tool that can help investors find undervalued stocks. It's not as well known as its cousins, the P/E and P/B ratios, but it is just as valuable. When used in conjunction with other ratios, it gives investors a perspective of how the market views a stock's growth ...
Types Of EPS Gertrude Stein said, "A rose is a rose is a rose," but the same cannot be said about earnings per share (EPS). While the math may be simple, there are many varieties of EPS being used these days, and investors must understand what each one represents if they're to make informed investment decisions. ...
Your psychological mind set may play a larger role in your trading career than your chosen technique or any other details associated with your day-to-day practice. Indeed, discipline is just one attribute of trading psychology, but it just so happens to be the most important psychological factor that affects a trader's success. There are four components ...
