Chroma Investing

Value Investing for beginning & small time investors and the value investing strategies of Graham & Klarman

Beginning Investor Terms – Price Earnings Ratio (P/E)

P/E or Price Earnings Ratio is the single most discussed concept there is in stock investing. That doesn’t mean it is the most important. Because a mind numbing number of people discuss Paris Hilton doesn’t make her important. O.k. maybe I have gone too far. P/E is more important than Paris Hilton. It is just overused and its limitations are not always understood by novice investors.

How to Use online Forums for Beginning Investors

There are numerous online forums that you can join or skulk through to get a feel for a company before you invest in it. They can be very valuable and very dangerous. My standard disclaimer applies. Just because it is written down doesn’t make it true. That goes double for anything on the internet. I have spoken briefly about some online forums and I will discuss a couple more.

Why Not to invest in ASPN a Net Net Stock

As I have posted previously, I review a lot of blogs, and do a fair amout work with screeners to look for the next great deal. I wanted to highlight why I did not take a position in a stock that was recommended by one of my favorite value bloggers: Greenbackd. It had all the makings of a company I would like. It was a net net stock with a catalyst to help extract the value, in this case a likely liquidation.

Sunday Beginning Investor Links

These are basic investing links, but extremely useful.

Investopedia – Investopedia is a site from Forbes that has newsletters, and lots of articles. But for the beginning Investor the best place to start is their Investing Dictionary, which is where I have linked. It is a good place to begin if you read a concept on this site or (in one of the many financial books you are reading) that you do not understand. It is a good beginning place. Sometimes the definitions do not have enough depth and require further investigation for a good understanding of a concept. And like everything else on the internet, sometimes their definitions are, how do I say this kindly, a bit off. All in all it is still worth looking at to get a grasp of terms that have thus far elluded you.

Yahoo Finance – Yahoo Finance while sporting an old school, visual overload style, it is more useful than Google Finance for one simple reason their online forums for individual stock are much better. I have linked to VaxGen (VXGN) message board, mostly because we have discussed it previously and it is still in the Chroma Investing portfolio.

Concepts for Beginning Investors

Since this blog is geared toward the beginning investor and people without a lot of capital to invest, I thought I would start a series that discusses concepts that all investors should understand, even, if they don’t subscribe to them. So, moving forward I will try to introduce a new investing concept in the middle of week. Usually Wednesday, but this is a blog that is FREE, so if it slips to Thursday take your complaints to the person you are paying.

How Often do Investment Opportunities Arise?

even within the value investing community there are different notions of how often real investment opportunities arise. Buffett has said you should only swing at a “fat pitch.” I loathe baseball, but think the advice is smart nonetheless. To me investment opportunities should be Great investment opportunities. If you can’t find anything looks like a great opportunity, you shouldn’t invest in anything.

What is value investing? The Old School Value version

Jae Jun over at Old School Value has an interesting post on how he defines Value Investing. I agree with everything he says. Which is no surprise since he is a smart guy with lots of good ideas. But there are a variety of opinions about what exactly value investing is, this is one perspective. For the beginning investors you will note a few interesting distinctions. Jae makes the Ben Graham division between investors and speculators. The latter in the value investing world represent what Dick Cheney is to liberals, the thing to avoid at all costs. I will give my working man synopsis of his post.

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