Beginning Investor Terms – Penny Stocks

Penny stocks are really any stock whose price per share is under a buck. The traditional wisdom is that Penny stocks are too be avoided at all costs. They are often volatile and illiquid, that is not traded in sufficient volume to enable easy entry into or out of a position in that equity.

A possible Net Net stock – but not for Me

I want to highlight an investment idea that Jae over at Old School Value posted: Insmed Inc. (INSM). I decided rather than ignore investment ideas that I don’t buy into, I would mention them and let you the reader decide if it interests you. Check out his evaluation here of INSM. He makes a good case for the stock. Some of you may want to invest in it. Jae is a very smart guy who has had lots of good advice, you could do worse than follow his lead.

Small Money Investors – Don’t Invest like Warren Buffett

When I say don’t invest like Warren Buffett, I mean don’t invest like Buffett does now. We can look at this in two parts.

Beginning Investor Terms – Price/Book ratio

It has been a couple of weeks since we had our last Beginning Investor Terms post, so lets get back in the saddle.

The Price to Book ratio (P/B) is a classic Value oriented term that is vital to understand, for understanding most schools of value investing. The equation is PB = Price per share/book value per share. Or an alternate is Market Cap/Book Value.

Greenbackd – Interview- Deep Value Investing

Simoleon Sense has an insightful interview today with the author of the great deep value blog Greenbackd. You can get to the interview here. Both blogs are terrific for incredibly different reasons and I have mentioned both in previous blogs, but it bears repeating.

Value Investing Congress 2009 – Macroeconomics are Important

You could think of this as a part two from yestedays post that laid out in outline what we missed for those of us that either didn’t know about or couldn’t attend the 2009 Value Investing Congress. One of the most interesting items I have read about this years Congress was the speech given by David Einhorn, a person I was not previously familiar with. You should download the speech NOW. He spoke about a previous failure that made him realize that as a good value investor you can not be agnostic to macroeconomic factors.

Value Investing Strategies for Beginning Investors – John Templeton

This is the third installment in our Investing Strategies for Beginning Investors. The first two explored Philip A. Fisher. This week we turn to the much respected John Templeton. Sir John, if youare into that kind of thing. When you look at Templeton you are veering into contrarian territory with an important dose of Deep value investment principles. Goodie.

Beginning Investment Terms – Earnings per Share (EPS)

Earnings per share is a pretty self revelatory. It is the net earnings of a company divided by the number of outstanding shares for a given time, usually a year, or one quarter. EPS= Net Income/shares outstanding. There are various ways of calculating this. If you go to the Income statement you will find a line item Net Income, which is your numerator. For smaller companies the number of shares can be as simple as the total shares at end of the period you are measuring. For a larger company or one whose number of shares changes during the measured period, a more accurate way is to use a weighted average of shares.

For companies where warrants or convertible shares or options are relevant then a better tool is to use the diluted earnings per share which includes all these potential shares in the number of shares outstanding. Thus the diluted earnings per share is usually lower than EPS.

Investing Styles for Beginning Investors: Philip A Fisher Pt. 2

This is the second post summarizing Philip Fisher’s investment strategy see Investing Styles for Beginning Investors. Old Phil Fisher’s investing strategy was pretty straight forward. He wrote an influenial book called Common Stocks and Uncommon Profits. In that book he outlined how he evaluated a company. Fisher asked fifteen key questions ( he called them points). You could not buy the company’s stock if you were unhappy with the results of your information quest.

Investing Styles for Beginning Investors: Philip A Fisher

The most important thing for beginning investors is to figure out what type of investing strategies they are comfortable with and then embracing it whole heartedly. But how do you discover what works for you? Of course you read this blog. But let’s say you want something more. You can always look at the greats, [...]

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