This is cute.. For a very long time, I had suspected some form of link between economics, finance with some forms of physics.. and here we are.. I just chanced upon this and when I read this, I was so very happy.
Econophysics - the physics of money and market
Showing posts with label Reviews. Show all posts
Showing posts with label Reviews. Show all posts
Monday, June 22, 2009
Monday, March 3, 2008
Why Dividends may speak louder than earnings
March 2, 2008
Two cents'worth: Why dividends may speak much louder than earnings
By Josh Peters, AUTHOR
THE stock market never seems to get the respect it deserves. It either gets too much credit - partying like it is 1999, so to speak - or too little, the bear market of 2001-2002.
As far as I can tell, this chronic problem stems not from the stocks themselves but from the way people choose to obtain their returns - and the way corporations have adapted to provide them.
Wall Street is obsessed with quarterly earnings reports. A firm that announces earnings exceeding expectations can see its stock price rise 5 to 10 per cent in minutes. A firm that fails to measure up can get clobbered by even larger proportions.
These reports get much more attention than dividend announcements, which are also made at roughly three- month intervals.
Earnings releases are long and chock-full of interesting details and figures. Dividend announcements may contain no more than a paragraph focusing on how large the dividend is and when it will be paid. They also tend to be fairly routine.
But even if earnings releases make much more interesting reading, dividends speak louder than earnings.
A firm's pattern of dividend payments can offer valuable clues to underlying performance, clues just as valuable as those provided by earnings reports, and definitely more useful than the conclusions one might draw from looking at a three-month stock chart.
Dividends are more than mere information - they provide insight that any investor can use to make successful investments.
What exactly is a dividend? Basically, it is a transfer of assets, almost always cash, from a corporation to its shareholders.
Not all corporations are willing to pay dividends, but many do. Some pay out a little, while others pay out a lot, thereby setting the investor free from fickle market prices and unreliable capital gains.
Extracted from The Ultimate Dividend Playbook by Josh Peters, published by John Wiley & Sons
Two cents'worth: Why dividends may speak much louder than earnings
By Josh Peters, AUTHOR
THE stock market never seems to get the respect it deserves. It either gets too much credit - partying like it is 1999, so to speak - or too little, the bear market of 2001-2002.
As far as I can tell, this chronic problem stems not from the stocks themselves but from the way people choose to obtain their returns - and the way corporations have adapted to provide them.
Wall Street is obsessed with quarterly earnings reports. A firm that announces earnings exceeding expectations can see its stock price rise 5 to 10 per cent in minutes. A firm that fails to measure up can get clobbered by even larger proportions.
These reports get much more attention than dividend announcements, which are also made at roughly three- month intervals.
Earnings releases are long and chock-full of interesting details and figures. Dividend announcements may contain no more than a paragraph focusing on how large the dividend is and when it will be paid. They also tend to be fairly routine.
But even if earnings releases make much more interesting reading, dividends speak louder than earnings.
A firm's pattern of dividend payments can offer valuable clues to underlying performance, clues just as valuable as those provided by earnings reports, and definitely more useful than the conclusions one might draw from looking at a three-month stock chart.
Dividends are more than mere information - they provide insight that any investor can use to make successful investments.
What exactly is a dividend? Basically, it is a transfer of assets, almost always cash, from a corporation to its shareholders.
Not all corporations are willing to pay dividends, but many do. Some pay out a little, while others pay out a lot, thereby setting the investor free from fickle market prices and unreliable capital gains.
Extracted from The Ultimate Dividend Playbook by Josh Peters, published by John Wiley & Sons
Sunday, February 10, 2008
Starting Early is More Important than IQ for successful investing
Two cents'worth
Starting early is more important than IQ for successful investing
By Dick Davis, AUTHOR
THE stock market is really a young person's game because young people have so much time to get it right. Youth is a big advantage and it's a message we should be getting across to our children.
Syndicated financial columnist James Glassman (TCSDaily.com) says: 'After 30 years of studying finance, I have found few eternal verities, but the most important - the Golden Rule of Accumulation - is this: Start early!
Time is the most important weapon in an investor's arsenal.'
At the 2005 Berkshire Hathaway annual meeting, Mr Warren Buffett said that the age at which one begins investing is the best determinant of success, not IQ. Only youth can afford the luxury of making mistakes with enough time left over for losers to become winners. Ideally, all our investing should be done before the age of 20, with our mature years spent reaping the rewards.
Instead, it's done in reverse. We usually have neither the money nor the smarts until we're well past our youth, and this is unlikely to change.
If you didn't start early, your children can. It's one way to help put your children on the path to a better life, and it doesn't take much. Since the youngest years are the most impressionable, starting them off in their pre-teens or teens can trigger a lifelong interest in investing. They can buy as little as one share of stock, but it should be a quality stock likely to go up over time and one that the child can relate to, such as Disney or McDonald's.
What's important is to just get started, not on paper, but for real. With his own money at stake, the child can begin to experience the up and down emotions that, hopefully, he'll learn to deal with in time. Checking out the stock price will expose the child to other financial information on the Internet or in the business section of the newspaper.
The sequence of exposure is important. Buying shares comes first, the homework comes second.
The other way round risks a quick turnoff from confusion or boredom. Websites like buyandhold.com, sharebuilder.com and firsttrade.com make it easy to get started. It's the excitement that comes from the child seeing his own money become more money without doing anything that's the big energizer. It's a turn-on that can spark a lifelong interest in investing.
Excerpted from Dick Davis' The Dick Davis Dividend, published by John Wiley & Sons.
Starting early is more important than IQ for successful investing
By Dick Davis, AUTHOR
THE stock market is really a young person's game because young people have so much time to get it right. Youth is a big advantage and it's a message we should be getting across to our children.
Syndicated financial columnist James Glassman (TCSDaily.com) says: 'After 30 years of studying finance, I have found few eternal verities, but the most important - the Golden Rule of Accumulation - is this: Start early!
Time is the most important weapon in an investor's arsenal.'
At the 2005 Berkshire Hathaway annual meeting, Mr Warren Buffett said that the age at which one begins investing is the best determinant of success, not IQ. Only youth can afford the luxury of making mistakes with enough time left over for losers to become winners. Ideally, all our investing should be done before the age of 20, with our mature years spent reaping the rewards.
Instead, it's done in reverse. We usually have neither the money nor the smarts until we're well past our youth, and this is unlikely to change.
If you didn't start early, your children can. It's one way to help put your children on the path to a better life, and it doesn't take much. Since the youngest years are the most impressionable, starting them off in their pre-teens or teens can trigger a lifelong interest in investing. They can buy as little as one share of stock, but it should be a quality stock likely to go up over time and one that the child can relate to, such as Disney or McDonald's.
What's important is to just get started, not on paper, but for real. With his own money at stake, the child can begin to experience the up and down emotions that, hopefully, he'll learn to deal with in time. Checking out the stock price will expose the child to other financial information on the Internet or in the business section of the newspaper.
The sequence of exposure is important. Buying shares comes first, the homework comes second.
The other way round risks a quick turnoff from confusion or boredom. Websites like buyandhold.com, sharebuilder.com and firsttrade.com make it easy to get started. It's the excitement that comes from the child seeing his own money become more money without doing anything that's the big energizer. It's a turn-on that can spark a lifelong interest in investing.
Excerpted from Dick Davis' The Dick Davis Dividend, published by John Wiley & Sons.
Sunday, January 6, 2008
Take your Lead from the world's great stock pickers
Take your lead from the world's great stock pickers
THERE'S no mystery to what makes a great stock picker. Great ones review hundreds or thousands of companies looking for clues to the right mix.
Warren Buffett
HE FAVOURS concentrated positions in companies he has carefully researched, and he sometimes holds stocks for decades.
Look for a long history of positive operating profits: five years or longer. Be sure the company's resources are generating ample profits. Rather than focusing purely on earnings and earnings growth, look for high returns on equity: at least 15 per cent.
Look for shares that are cheap relative to real cash earnings.
You can do this by looking for low price to free cash flow ratios. Be sure the company is creating profits for shareholders in the form of higher stock prices. Look for share price growth that has exceeded retained earnings growth over the past few years.
Peter Lynch
HE DIVIDES companies into six categories, such as stalwarts, turnarounds and fast growers, and gives different promising signs to look for in each.
Small, fast-growing companies are among his favourites, so let's focus on those. Look for earnings growth that's fast but not too fast. Growth rates that are too high might not be sustainable for long.
Favour companies that are growing earnings at between 20 per cent and 50 per cent a year. Look for relatively undiscovered companies. You can do this by searching for low levels of institutional ownership, which show that investment funds and the like haven't yet caught on to the stock.
You can also look for stocks that are covered by no more than a few Wall Street analysts.
Look for insider buying. Look for manageable debt levels.
Watch for debt to capital ratios that are below industry averages.
Excerpted from Jack Hough's Your Next Great Stock, published by John Wiley & Sons, Inc.
THERE'S no mystery to what makes a great stock picker. Great ones review hundreds or thousands of companies looking for clues to the right mix.
Warren Buffett
HE FAVOURS concentrated positions in companies he has carefully researched, and he sometimes holds stocks for decades.
Look for a long history of positive operating profits: five years or longer. Be sure the company's resources are generating ample profits. Rather than focusing purely on earnings and earnings growth, look for high returns on equity: at least 15 per cent.
Look for shares that are cheap relative to real cash earnings.
You can do this by looking for low price to free cash flow ratios. Be sure the company is creating profits for shareholders in the form of higher stock prices. Look for share price growth that has exceeded retained earnings growth over the past few years.
Peter Lynch
HE DIVIDES companies into six categories, such as stalwarts, turnarounds and fast growers, and gives different promising signs to look for in each.
Small, fast-growing companies are among his favourites, so let's focus on those. Look for earnings growth that's fast but not too fast. Growth rates that are too high might not be sustainable for long.
Favour companies that are growing earnings at between 20 per cent and 50 per cent a year. Look for relatively undiscovered companies. You can do this by searching for low levels of institutional ownership, which show that investment funds and the like haven't yet caught on to the stock.
You can also look for stocks that are covered by no more than a few Wall Street analysts.
Look for insider buying. Look for manageable debt levels.
Watch for debt to capital ratios that are below industry averages.
Excerpted from Jack Hough's Your Next Great Stock, published by John Wiley & Sons, Inc.
Subscribe to:
Posts (Atom)