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Monthly Archives: June 2012
Analyzing Annaly
I get asked a lot about investing in mortgage REITs. Investors are being “pitched” these mREITs as conservative “income” investments with yields of 10-15%. They seem like a safe bet, as “you would need Fannie / Freddie to go under … Continue reading
Make sure you GET PAID!
Back in 2008, I contemplated investing in a liquor store. I discovered I would have needed to purchase a substantial amount of quantity in order to get the lowest prices on each kind of alcohol, resulting in a sizable initial … Continue reading
YHOO isn’t really Yahoo!
SOTP = Sum Of The Parts. When you have a company which has separate distinct businesses, or minority stakes in non-core businesses, they can be undervalued because “the Market” tends to discount some of the assets. Think about a company … Continue reading
Hindsight is always 20/20
I have a client that told me he invested in Ford (F) at under $2 per share in 2009, and that “it was the best investment he had ever made.” I keep on telling people “An investment’s end result, does … Continue reading
Ignore the PE!
When a company buys an asset it goes on their balance sheet under PP&E (Plant Property & Equipment). It is counted as an asset (together with current assets (like cash and accounts receivables)) vs. the liability side of the balance … Continue reading
What cash flows to “discount” when valuing an Equity?
In yesterday’s Apple post, I used a basic Bond example to explain the importance of the Discount Rate. The Cash Flows that were discounted in that example (and in any Bond) are obviously the interest & principle payments. These cash … Continue reading
The real Bull / Bear case on Apple, Inc.
DCF Basics. Why Discount Future Cash Flows? One of the principals of Fundamental Analysis is called “DCF“ or “Discounted Cash Flow (Analysis)”. An asset should be worth the money it will pay you over its lifetime. For example, a 5yr … Continue reading
It’s not Facebook! It’s the IPO Market!
Whose “fault” is it? Facebook? Morgan Stanley? The NASDAQ? The Media? This whole episode has a lot to do with the IPO evolution over time… I will illustrate my point via one of the most important IPOs in each of … Continue reading
