Analysts normally use the discounted cash flow method to analyze stocks. But this method usually ends up returning shockingly poor results. Instead, there are three simple methods of stock analysis that work wonders, says Floyd Brown over at InvestmentU.com ...
Cash Balances and Debt
When the economy turns down, the highly leveraged firms are the ones that get in trouble first. This is part of the problem for GM and Ford right now, and it was the problem with Bear Stearns. If you have large debts, the interest payments alone are a constant drain. On the other hand, a company like Microsoft - with large stores of cash and no debt - can weather any storm. Amazingly, sometimes a firm’s stock price won’t adequately value the cash it holds.
Cash Flow
The market will - over time - value cash flow in similar ways. Look for times when the market undervalues a company’s cash by finding out how much cash a company is producing today. Cash flo...
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Hot Sectors and Bad News: Don’t Cheer for Gold If You Want a Bull Market BackFrom: contrarianprofits.com
Post Date: 2008-07-17 15:35:54
Once again gold is on the stock market’s center stage, and that should catch your attention whether you love it, hate it, or don’t normally care about gold at all.
Maybe you want to give it the hook. If you have a hefty portfolio of stocks, especially if most are in sectors other than precious metals, you should pray the yellow metal down from its heights as it reaches toward $1,000 again.
I have nothing against gold, per se. Rising Tide even has an outstanding gold mining business in...
more Fifteen Minutes of FameFrom: contrarianprofits.com
Post Date: 2008-07-17 15:28:38
"In the future", noted the famous pop art icon Andy Warhol, "everyone will be famous for fifteen minutes." Mr. Warhol was not setting the time limit of "fifteen minutes" because there were so many famous people in a queue who were waiting to become famous.
Rather, Mr. Warhol’s comment was about the short attention span that tends to rule the mind of most humans. Fifteen minutes, he surmised, was the extent of the human mind’s ability to stick with something.
But Mr. Warhol made...
more Global Investing Roundups Thursday, July 17th, 2008From: contrarianprofits.com
Post Date: 2008-07-17 15:20:56
Wells Fargo Jumps 32% on Dividend Hike; Crude Falls $10 in Two Days; Home Building Collapses; Gazprom Threatens to Take Belarus to Court; Gannett’s 2nd Quarter Tumble; SK Telecom Eyes up Sprint?; Time Warner Travels to Seattle; Delta’s $1 Billion Loss Turns to Gains
Wells Fargo Co. ( WFC ) stock jumped 32% after the nation’s fifth largest bank raised its dividend by 10%, from 31 cents a share to 34 cents. The company reported second-quarter profit fell 22&#...
more The Lost Decade: How the U.S. Financial Crisis Resembles Japan’s Ten Years of Misery - And How to Play itFrom: contrarianprofits.com
Post Date: 2008-07-17 15:09:18
If you think the "Lost Decade" Japan endured during the 1990s was deep and painful, stick around: As the global financial crisis that was jump-started by the meltdown of the subprime mortgage market continues to unwind, the U.S. economy is headed for a financial Ice Age that will make Japan’s 10 wasted years seem like a single chilly night.
The two meltdowns started in much the same way - with busted stock-and-real-estate bubbles. With both the United States and Japan, the market manias wer...
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