Harold, a dear friend, called me early this week and told me about GT Advanced Technologies (GTAT). The company’s stock closed at $11.05 per share on Friday, October 3, 2014 and declared bankruptcy following the weekend, on Monday, the 6th. The stock closed at .80 a share that Monday. Later this week, a good friend, Bill, e-mailed me and suggested I write about GTAT in this week’s post. Thanks to Bill for making the suggestion. […]
Webster defines stewardship as “the careful and responsible management of something entrusted to one’s care.” If the topic is managing money, we describe the stewardship as “financial.” […]
This past week, I got a very nice e-mail from a reader of my book who lives in Hong Kong. I could tell he was knowledgeable about the balance sheet. He wondered why the balance sheet does not play a more important role in investing and why so much emphasis is placed on future expectations, growth and earnings. If you’ve read my book and followed my blog posts, you know that this reader is in the same camp of thought as I am. […]
When searching for a company that might satisfy my investing criteria, I’m looking for a situation where the market capitalization (current stock price multiplied by the number of outstanding shares) is less than the book value (equity) of the company. That is, I’m looking for a company where the stock market is pricing that company for less than the value being assigned to it by the internal accounting function. Thus, my P/B filter is set to under 1.0. My goal is to buy at a low price and that means buying all the equity I can get for my dollar. So, the P/B is the best place to start filtering for low-priced stocks, in my view. […]
Whether you invest in the stock market or just read the financial news, you are probably coming across opinions expressed with regard to an anticipated stock market correction. After all, the market has been on a steep incline pretty much since it bottomed in the spring of 2009 during the hard recession days. Couple that with the fact that there are a lot of people who don’t “feel” like their financial situations have improved all so much and the result is that the sustained rise in the stock market can leave a person scratching his/her head for an answer as to how it keeps going. […]
Today, I’ll deviate from any discussion of stock investments or financial talk. Last night, my wife and I watched an NBC News Special, “Saving Dr. Brantly.” In this program, Matt Lauer interviewed Dr. Kent Brantly, a Christian medical missionary serving in Liberia. It was truly an inspiring story of the personal battle recently faced by Dr. Brantly as he contracted the deadly Ebola virus while serving those sickened by Ebola in Liberia and yet eventually recovered.
As I sat down to write my post, I was moved to delay what I would otherwise share today in favor of providing the link to the interview. My wife and I found the story tremendously encouraging. If you have not seen it, I believe you will find it well worth the time it takes to watch. Note that the entire interview is in six parts, ranging from about 5 minutes to over 7 minutes per part. So, you can watch it incrementally if you don’t have the 40 minutes or so to see it all at once. Next week, I’ll return to some more stock talk.
http://www.nbcnews.com/video/dateline/55997372#55997272
The term book value is an accounting term that simply refers to the value(s) we record on the books for the various accounts tracked by a company. We track the values of the resources a company has to work with, namely assets. We track the values of the obligations assumed by the company to help support its asset structure, namely liabilities. The excess of the assets we record over the liabilities we record is the equity, the remainder that represents the net book value of the company. […]
Mississippi State University graciously hosted the second Choose Stocks Wisely seminar at its Meridian campus on July 31, 2014. The first one was held back in December of 2013, shortly after my book, “Choose Stocks Wisely” was released. The seminar was held in the same room of the MSU facility as in December. […]
Last week, I talked about the importance of investing in wealth-building businesses over pursuing momentary profits. If I’ve been successful at my stock investments such that my portfolio reflects more wealth, it can bring a certain sense of security, financially speaking. One need only consider several years back during the recession-beaten stock market of 2008 and 2009 to see how tenuous material possessions are, though, and that they cannot provide lasting peace. […]
If you’ve owned stocks before and observed stock price behavior, you’ve realized how sensitive stock prices are to each successive quarterly earnings report. If the earnings report pleases the investment community, the stock usually reacts favorably and does so to the degree of momentary pleasure derived. The same can be said about the negative impact to stock prices when the earnings report disappoints market participants. […]
