June 14, 2016


If you could buy a $100 bill for $80, wouldn’t you jump at the chance to do so? While value investing is a little more complex than that, it’s the general concept behind finding undervalued stocks for your portfolio. This sounds like a great idea in principle, but how do you find these amazing bargains? Here’s a list of five steps to take in order to find undervalued stocks of your own. The five steps are: understand why stocks become undervalued, only look at businesses you understand, know the metrics, go beyond the numbers, and the final rule. Understanding why stocks become undervalued involves a few potential reasons such as missed expectations, market crashes and corrections, bad news, and cyclical fluctuations. When you’re looking for an undervalued stock make sure you’re picking a business you understand or as I’d like to say a business that you love. If you enjoy drinking Coca-Cola, you’re more prone to research the company and look at its earnings vs. a company that sells steel. The author says. For example, I have a strong understanding of the banking industry, as well as real estate, energy, and consumer goods, so stocks in those industries make up the majority of my portfolio. On the other hand, I really don’t have a good grasp on the biotech industry so I simply won’t invest in it. Don’t get me wrong — I’m sure there are a lot of great companies in biotech, and many could indeed be undervalued right now, but it’s just not my area of expertise. When you’re looking for undervalued stocks use these metrics: P/E ratio, P/B ratio, ROE, Debt to Equity ratio, current ratio. As a word of caution, metrics are indicators and tell a story. It’s important to increase your financial literacy so you can begin to see what the company is doing on paper and look below the surface. Look for companies that have an obvious competitive advantage. The author states Wal-Mart as an example. The final rule is patience. At times the market will be expensive, and it’s important to know what price you are willing to buy at. You make money when you buy not when you sell. Whoever is patient has great understanding, but one who is quick-tempered displays folly. Proverbs 14:29 NIV.


The eight-hour workday is an outdated and ineffective approach to work. If you want to be as productive as possible, you need to let go of this relic and find a new approach. The author states that the eight-hour work day was created during the Industrial Revolution to cut down on the number of hours of manual labor that workers endured in the factory. Back then it was a more humane approach, and prior to this point in time during the Agrarian age, farmers would spend even longer hours working fields. It only makes sense that there is an argument for a change in the work day schedule for the Information Age. A study recently conducted by the Draugiem Group used a computer application to track employees’ work habits. Specifically, the application measured how much time people spent on various tasks and compared this to their productivity levels. In the process of measuring people’s activity, they stumbled upon a fascinating finding: the length of the workday didn’t matter much; what mattered was how people structured their day. In particular, people who were religious about taking short breaks were far more productive than those who worked longer hours. The ideal work-to-break ratio is 52 minutes of work followed by 17 minutes of rest. the brain naturally functions in spurts of high energy (roughly an hour) followed by spurts of low energy (15–20 minutes). The best way to fight distractions and exhaustion is to not fight your way through it; rather take a break and go for a walk and allow your mind to clear. If your work environment permits it, I suggest you put this strategy to the test and feel free to let me know your results in the contact me section.


What does the wealthy 10% understand that the other 90% are missing? originally appeared on Quora, the knowledge-sharing network where compelling questions are answered by people with unique insights. Here are 7 secrets: the big money is served in small increments, wages and income are what the job is worth, not the individual, personal debt is not a “tool,” it’s shackles—delayed gratification is more gratifying than instant gratification, the value of the dollar you have vs. unearned future dollars, math, the importance of life insurance, and lotteries are just another tax on the poor. Your return on investment whether it’s from investments, profits, or margins on products you’re selling, the small increments compounded over and over again is what helps a person and company retain and make money over and over again. Small steps compounded over time will create large ripples. Your job will pay you what the job is worth, however you as an individual are worth far more than $30,000 or even $300,000 per year. A good way to prove this point, if you were to go missing, your loved ones who truly love you will pay any price to find you. This point makes me think of the prodigal son who returns home to have his father restore him completely because he’s so happy to have him home. I encourage you to bring value wherever you go whether as a company or an individual. Another way of saying it is leave things better than you find them. If your heart and mind operates from this frame of being, you will see incredible results. You have to be wise about personal debt. When you carry debt, you’re in essence renting an asset from the bank and or credit card company. If you end up filing bankruptcy, you either surrender all your assets or surrender your way of living. Granted there are unforeseeable circumstances in which bankruptcy is unavoidable. However, if you can’t pay for it with cash or pay off your balance within 60 days on a credit card then you become shackled to that credit card. The rich ruleth over the poor, and the borrower is servant to the lender. Proverbs 22:7 KJV. I encourage you to pay yourself with interest and become the bank. Why not train yourself and make your savings account become like a line of credit. If you’re interested in learning more than contact me in the contact me section to learn more. Instead of buying goods that you know you will replace in a short amount of time, save up money and buy good quality products that will last longer so you save on spending future dollars that you can use to invest in income producing assets, or spend on other goods. To add to the author’s point, don’t just buy great quality products, but buy great quality products at a savings. Ask yourself: Is the sticker price the final offer? By nature, a business will build a great quality product out of great materials, but there will always be a margin so the company can make a profit. How can I cut that margin down enough for the company to still make a profit and yet save a few dollars in my pocket? That’s how you need to look at not just products you buy but investments also. Math is very important. It’s one of the core skills taught in public and private education. Math created a lot of the technology we use, but at its most essential level, it also shows the power of interest rates. In the example the author used, without an understanding of how loans work, a person can end up spending a lot of money. Use the power of compound interest for you and not against you. Life insurance, especially today, is even more affordable than it used to be. For small amounts of money, you can potentially leave a financial legacy to those after you less fortunate. The lottery even if you win it, you won’t receive the full amount. It’s understood we’d gladly pay half to receive $100 million, but remember that the odds of winning are small so don’t allow buying lottery tickets to become an addiction. The author concludes saying it’s important to live within your means. Successful people know it’s not about how much you make; it’s about how you spend it. I’d also like to add: It’s not about how much you make. It’s about how much you keep, and how hard what you keep works for you.

If you need agreement in prayer, or if you’re in need of a financial checkup you can reach me in the contact me section.

“But those who want the best for me, Let them have the last word—a glad shout!— and say, over and over and over, ” GOD is great—everything works together for good for his servant.” I’ll tell the world how great and good you are, I’ll shout Hallelujah all day, every day.”

Psalm 35:27-28 MSG


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