Items in italics are direct quotes from the articles below
Although it must be clear that what happens to prices of stocks over short periods of time is largely a reflection of changes in investor psychology, there is more than enough information readily available to assist in the process of identifying issues that have a better-than-average chance of outperforming the market. Understanding the importance of this information is the difference between the astute investor and one who is awash in incomprehensible data. In my early training as an analyst at the prestigious Value Line organization, I was part of a group of dozens of researchers who assembled and published a comprehensive range of data on well over 1,000 of the most actively traded companies. Each single-page report contained numerous data points as well as concise commentary about the companies covered. Yet the reality was there were only a handful of key factors that told the tale of where things stood. Things have not changed in today’s world of information overload. However you go about this process, it’s essential to be aware that stock selection must lead to portfolio selection. By analogy, the task is that of picking a team with a dozen or more well-chosen players. It is most certainly not an effort aimed at coming up with only one or two superstars. The five factors are: price-earnings growth ratio, relative strength index, consistent earnings growth, coefficient variance, and free cash flow (FCF). The PEG is calculated by dividing the price-earnings ratio (P/E) by the prospective rate of growth. So if the P/E is 20 and the growth rate is 10%, the PEG would be 2.0. Although there’s no strict rule of thumb, the typical range for a PEG would be between 1.0 and 2.0, so in this example, the PEG would be considered to be stretched. (For more from this author, see: Understanding Stock Valuations: Price-Earnings Ratio.) This ratio will measure a company that is growing rapidly and help you see if it’s an actual good investment. The Relative Strength Index is a measure of the stock’s price against the market. It’s used as a check of a company’s performance relative to the market. There’s nothing like consistency of earnings growth to help expand stock valuations. If over time earnings have grown steadily and without interruption, there will be good reason for investors to be confident that more of the same lies ahead. Always check at least the latest three years. (For related reading, see: Steady Growth Stocks Win the Race.). The Coefficient Variance is a measure of the consistency of analyst’s estimates of earnings. FCF is the cash that’s left over after taxes, capital expenditures and debt repayments. When there’s free cash flow, there’s capital available for further company expansion. Another measure banks will use when looking at a company’s financials is cash available to service debt. This number reflects cash available after adding back interest, depreciation, interest, and any acceptable add backs. When you are looking to invest in a company, think about being a bank. You are lending money to a company expecting your investment to be paid back at a rate of return. The opposite is also true, if you ever lend then you should look at it as an investment. Don’t lend or invest on income you need to live off of, only lend or invest on disposable income, and be willing to lose it all.
Everything we know about In-N-Out’s reclusive 35-year-old president who just became one of the youngest billionaires in America. Thirty-five-year-old Lynsi Snyder became one of the youngest billionaires in the US this week, after inheriting full control of the burger chain In-N-Out. Snyder inherited 50% of In-N-Out’s shares when she turned 30, and on Friday — her 35th birthday — she acquired most of the chain’s remaining shares. The inheritance makes her one of the youngest female billionaires in the country. The famously reclusive heiress has been married four times and suffered through a spate of family tragedies, including the death of her father when she was just 17 years old. Snyder has only spoken to the media a handful of times over the past decade. Here’s what we know about her life. This selection will contain mostly quotes due to the nature of this article.
Snyder’s grandparents, Harry and Esther Snyder, opened the first In-N-Out restaurant in 1948. Snyder became president of In-N-Out in 2010 and in 2012, she inherited 50% of the company’s shares. Since taking the position as president, Snyder has expanded In-N-Out to six states from four. She has changed almost nothing else about the brand, which prides itself on a simple menu of burgers and fries. When asked about her future plans for In-N-Out, Snyder told CBS she would “never” take the company public or franchise its restaurants. “The only reason we would do that is for the money, and I wouldn’t do it,” Snyder said in the interview. In fact, she doesn’t plan to change much about the burger chain. “My heart is totally connected to this company because of my family, and the fact that they are not here — I have a strong tie to keep this the way they would want it,” she said.
I encourage you to read this article, because it isn’t long, has pictures, and gives a fascinating insight into this private heiress. You can have success and live a private life. Be who you are in public and private. Your words and your actions behind your words carry more weight than any bank account ever will.
For this week, I’ve included BREAK THE BAD HABITS – Motivational Video 2017 from Be Inspired YouTube channel.
“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.”
Proverbs 28:26 MSG