Dr. Paul W. Allen

Managing Debt; It’s Serious Business

I see so many corporate balance sheets of large companies today, even companies that pay dividends, which reflect liabilities (obligations) that significantly exceed assets (resources). When you exclude any intangible assets (goodwill too) from the asset base, the liabilities are that much greater than the assets. Of course, this means that the companies reflect negative equity since assets less liabilities leave equity. Typically long term debt forms a large portion of the company obligations in these situations where liabilities are greater than assets.

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August 2nd, 2014|Balance Sheet, financial leverage|2 Comments

Form 8-Ks

Two weeks ago I wrote about a type of Securities and Exchange Commission (SEC) filing, namely the Form 4 used for informing the SEC (and, in turn, investors) of insider transactions in their company’s stock. I intended to write about SEC Form 8-Ks a week ago, but instead decided to present a brief video where I could thank you for your support of my “Choose Stocks Wisely” effort in a more personal way than via the written word. I do wish to say thank you once again today via this written post for all your support.

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July 26th, 2014|material events, SEC filings|0 Comments

Form 4s

This week and next, I’ll briefly discuss a couple of important types of filings required of companies by the Securities and Exchange Commission (SEC). Today, I’ll mention the form 4 filing. […]

July 12th, 2014|insider trading, SEC filings|0 Comments

A Christian View Toward Money

Today’s post looks at some scriptures from the Bible that relate to using God’s resources wisely. If the end purpose of managing money wisely, including investing in common stocks wisely, is simply to “be rich,” earthly life will come to an end one day and so will whatever momentary pleasures that were extracted from the riches gained. […]

July 5th, 2014|God, money|0 Comments

It All Comes Down to Judgment

When you buy a stock, in the final analysis, it all comes down to your personal judgment. Since that is the bottom line to choosing a stock, how one goes about exercising that personal judgment is critical.

A favorable outcome has a “high probability” of resulting from following this little equation: Low price + high quality + solid outlook = favorable investment outcome

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June 28th, 2014|Balance Sheet, judgment, performance outlook|0 Comments

Accounting Numbers

When it comes to assessing the value of a company today, the financial statements clearly play an essential role. Without the financials, we simply would not even have a place to start.

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June 21st, 2014|accounting numbers, GAAP, Investing|0 Comments

Effect of Stock Splits on Adjusted Floor Price

This week, a reader of “Choose Stocks Wisely,” wrote me and offered a great suggestion for the post I’m doing today. He brought to my attention the 7 for 1 stock split recently accomplished by Apple, Inc. (symbol AAPL). APPL had traded well over $600 per share before the split of June 9th but since has traded below $100 a share, reflecting the split.

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June 14th, 2014|outstanding shares, Scorecard, stock splits|0 Comments

Pride Precedes a Fall

Truths found in Scripture (the Bible) apply to all aspects of life, including investing in common stocks. The Bible is very clear about God’s position toward the proud. It is referred to as an abomination to God in Proverbs 6:17. James 4:6 states that “God resists the proud, but gives grace to the humble.” In Proverbs 16:16, we read “How much better to get wisdom than gold! And to get understanding is to be chosen rather than silver.” Proverbs 16: 18, 19 tells us “Pride goes before destruction, And a haughty spirit before a fall. Better to be of a humble spirit with the lowly, Than to divide the spoil with the proud.”

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June 7th, 2014|Balance Sheet, God, stewardship|0 Comments

Don’t Drink the Kool-Aid

I want to continue a theme I started two weeks ago with a post titled “Making the Minimum Credit Card Payment” and followed-up last week with another post called “Choosing Weak Balance Sheets and High D/E Ratios.” I know some of you read the May 27 Bloomberg piece linked next because you wrote me about it this past week (Thank you for that):

http://www.bloomberg.com/news/2014-05-26/bad-credit-no-problem-as-shares-of-balance-sheet-bombs-rise-94-.html

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May 31st, 2014|Altman Z, Balance Sheet, common stock, stewardship|0 Comments

Choosing Weak Balance Sheets and High D/E Ratios

Think of this week’s post as somewhat of a follow-up to last week’s one called “Making the Minimum Credit Card Payment.” Al is someone who read my book, “Choose Stocks Wisely: A Formula That Produced Amazing Returns,” and he has written me from time to time. He has become a friend and our recent e-mail conversations led to today’s post. Al wondered at my thoughts over two issues he read about very recently, namely that weak balance sheets are expected by Goldman Sachs to outperform strong balance sheets looking ahead and that companies with high financial leverage ratios (debt to equity) have outperformed companies with lower debt to equity ratios. The following two links Al sent me are below:

About Dr. Paul W. Allen