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:
http://www.valuewalk.com/2014/05/weak-balance-sheets-lead-market/
http://www.fatpitchfinancials.com/2256/total-debt-to-equity-ratio-backtest/
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