October 28, 2017

 

Items in italics are direct quotes from the articles below

https://www.marketwatch.com/story/sell-these-5-scary-stocks-now-2017-10-27
This year has been a treat for investors, and it could end up even sweeter. The S&P 500 SPX, +0.31%  has tacked on 14% so far — and that’s before year-end rebalancing and hopes of a “Santa Claus rally” that could push the index even higher. Even if stocks do little from now on, it could be the best annual gain for the index since 2013. Still, that doesn’t mean you can just pick stocks out of a hat and hope for the best. This earnings season has created plenty of losers along with the winners, and there are a number of high-profile companies right now that have downright spooky outlooks. So which high-profile names have more tricks than treats in store for shareholders right now? Here are five particularly scary stocks I’m avoiding: Tesla, General Electric, Snap, J.C. Penney, and Valeant. The author’s opinion is valid, and it’s good to listen to different points of view to make a more educated decision. Even if you don’t agree with the opinion, listen and ask yourself, what does this person see that I’m not seeing? Take in the information, and make your own decision. Tesla isn’t a company that trades based on its profitability, but rather on sentiment and expectations. But it’s hard to see what the catalyst is to push sentiment, while there remain some very real downside risks. Case in point: Even as the car recently announced a deal to build cars in Shanghai, a move that should objectively be good for investors, the stock closed lower on the day. You may see Tesla as a good buy. Ask yourself am I investing for capital gains? If so for how long?  In the case of GE, I spoke with a friend of mine who was in the brokerage business for many years, and his opinion is that if you have enough liquidity and a long time horizon, buy GE. This blog is for education purposes only, so I suggest you do the research and make your own informed decision. Even if you have faith that things will work out in the long term and that GE will turn things around, the dividend is very much at risk. Beyond paying out more in dividends than earnings (under GAAP accounting, not its adjusted numbers), GE is sitting on a staggering $31 billion shortfall in its pension liabilities and will have to pay the piper eventually. All that adds up to a very real case against this stock. Don’t be foolish enough to think the deep declines of 2017 can’t continue for GE in 2018, too. Make time every day to gain new information in an asset class you enjoy, and find ways to execute your investment strategy.

https://www.marketwatch.com/story/kyle-bass-says-once-the-stock-market-starts-to-crack-this-will-be-the-first-sign-2017-10-18

The stock market may never go down again. Maybe not such a far-fetched notion, when you consider the Dow industrials yesterday nailed its 50th record close of the year and paid a visit to the 23,000 milestone, which it looks set to revisit and maybe stick to today. To be sure, being in the trenches of this market since the election has been a bit crazy-making, even if it has made investors some money. And naturally, there is discomfort out there over the speed of gains, such as how the DJIA has overcome a pile of worries to gain 4,700-plus points in just under a year. Given that, taking a step back and a look around is never a bad idea. That brings us to our call of the day from Kyle Bass of Hayman Capital Management, who has a timely warning on an “air pocket” that’s coming as we near the 30th anniversary of Black Monday. “If you look at the all of the different constituencies of the market today, it resembles the portfolio insurance debacle of 1987 on steroids,” he says an interview with Real Vision TV released to YouTube today, but recorded a few weeks ago. The key metric to watch for is when a 4% or 5% decline in equities becomes a 10% or 15% decline. What’s adding concern to this situation is the massive switch from active to passive investing. That means risk is “in the hands of people who don’t know how to take risk,” the hedge fund manager says. The message overall was clearly to cut back on a bit of risk, look at cash, and peel back a bit on where there have been some good runs. In this type of scenario, what is your experience with paper assets? Do you know how to short? Do you know how to use options? How can you profit from a market that falls? Do you have enough in liquid reserves or are you completely in one asset class? If you find yourself getting tunnel vision. Ask yourself what is your legacy and how does this impact eternity?

A few blogs ago I had mentioned adding a self-improvement and technical analysis section. Due to my growing interest in the cryptocurrency industry, I’ve added a cryptocurrency section also.

This week, I’ve included Why is this THE MOST MOTIVATIONAL TALK EVER?? See for yourself from the Video Advice 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

 

 

 

 

 

Advertisements

June 21, 2017

Items in italics are direct quotes from the articles below

https://www.inc.com/logan-chierotti/self-made-billionaire-john-paul-dejoria-shares-2-facets-to-becoming-a-successful.html

Once as a young man, John Paul DeJoria was homeless. Today, this self-made entrepreneur is worth over $3 billion. The founder of Paul Mitchell Systems and Patron Tequila, DeJoria recently gave a speech at the TEDx conference in Los Angeles. A first-generation American turned entrepreneur, DeJoria is an excellent example of achieving the American dream. His personal story and the companies he created are nothing less than inspirational. He is a socially minded business owner who develops brands around the pillars of sustainability, social responsibility, and animal-friendliness. He is also a member of The Giving Pledge, a philanthropic gathering of the wealthiest families in the world who are all committed to donating the majority of their wealth toward pro-social causes. But for DeJoria, that dream didn’t come without a lot of hard work and a resilient spirit. In his TEDx speech, DeJoria discusses how he overcame obstacles in his life and shares a few secrets to gaining an edge on the competition. DeJoria believes in this important attribute: going the extra mile. It’s about working hard. In his speech, DeJoria sums up his point, saying, “Doing what you should be doing, even when no one is watching.” DeJoria has two facets to becoming a successful entrepreneur:

1. Be Prepared For A LOT Of Rejection – Rejection is an inevitable part of the entrepreneur’s journey, especially when starting out. In the beginning, DeJoria suggests that we must not listen to people who doubt our abilities and just keep pushing. More importantly, by being properly prepared to deal with rejection, you will be much less affected by it.

2. Produce A Service Or Product Of The Highest Quality – While some companies worry about generating income over all else, DeJoria believes the quality of a product is critical. “You want your product or service to be so good,” says DeJoria, “that you’re not in the selling business, you’re in the re-order business.”

These lessons are straightforward, and yet they are widely applicable. If you implement them into your life, maybe someday you will reach the level of success Mr. DeJoria has. However, if you do, try to live with his motto in mind.

“Success unshared is failure.” – John Paul DeJoria

http://www.investopedia.com/articles/investing/110613/market-value-versus-book-value.asp

Understanding the difference between book value and market value is a simple yet fundamentally critical component of any attempt to analyze a company for investment. After all, when you invest in a share of stock or an entire business, you want to know you are paying a sensible price. Book value means the value of the business according to its financial statements. In this case, book value is calculated from the balance sheet, and it is the difference between a company’s total assets and total liabilities. Note that this is also the term for shareholders’ equity. For example, if Company XYZ has total assets of $100 million and total liabilities of $80 million, the book value of the company is $20 million. In a very broad sense, this means that if the company sold off its assets and paid down its liabilities, the equity value or net worth of the business, would be $20 million. Market value is the value of a company according to the stock market. Book value is the value of the company based on its books also known as the accounting value. Market value has a more meaningful implication in the sense that it is the price you have to pay to own a part of the business regardless of what book value is stated. Due to the importance of this article’s content, I’ve included a lot of the content. It’s worth reading.

There are three basic generalizations about the relationships between book value and market value:

  1. Book Value Greater Than Market Value: The financial market values the company for less than its stated value or net worth. When this is the case, it’s usually because the market has lost confidence in the ability of the company’s assets to generate future profits and cash flows. In other words, the market doesn’t believe that the company is worth the value on its books. Value investors often like to seek out companies in this category in hopes that the market perception turns out to be incorrect. After all, the market is giving you the opportunity to buy a business for less than its stated net worth.
  2. Market Value Greater Than Book Value: The market assigns a higher value to the company due to the earnings power of the company’s assets. Nearly all consistently profitable companies will have market values greater than book values.
  3. Book Value Equals Market Value: The market sees no compelling reason to believe the company’s assets are better or worse than what is stated on the balance sheet.

It’s important to note that on any given day, a company’s market value will fluctuate in relation to book value. The metric that tells this is known as the price-to-book ratio, or the P/B ratio:

P/B Ratio = Share Price/Book Value Per Share

(where Book Value Per Share equals shareholders’ equity divided by number of shares outstanding)

The author goes on to compare the metric of book value vs market value by analyzing Coca-Cola and Wells Fargo & Co. It’s important to determine whether book value or market value is your metric in making a financial decision regarding a company. My opinion is book value and market value are dependent upon the level of commitment to your investment strategy. If your strategy is to invest in paper assets then book value and market value can play a factor in your decision, but if you are going to buy a company that is publicly traded then there are other factors that you must consider. In other words, the greater the commitment, the more work you should put in to ensure that your investment produces income. Remember an investment should be an income producing asset. If it’s passive income, and that income is greater than your expenses then you are wealthy.

If you are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about the self-lending principle in the mustard seed section.

For this week, I’ve included WHO WILL YOU BECOME? – 30 Minute Epic Workout Motivation Friday from Basquiat Picasso 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

May 17, 2017

Items in italics are direct quotes from the articles below

http://www.businessinsider.com/how-to-buy-bitcoin-using-coinbase-2017-5

A year and a half ago, the idea of buying the virtual currency bitcoin was laughable. After a rapid rise in value in 2013, the cryptocurrency’s value more than halved by mid-2015. At its lowest point, one bitcoin was equal to about $230. But now Bitcoin is at an all-time high, and rising. Within the last month, the price of one bitcoin has climbed from $1,280 to around $1,480. Given the currency’s covert nature, the average person still may not understand how buying and selling actually works. Using the app Coinbase, which lets anyone trade bitcoins for a small fee, we decided to find out. A brief warning: If you’re going to do this, tell your bank you’re about to buy bitcoin. More on that later. This article provides a step by step process of buying Bitcoin, so I recommend reading the article if you’re interested in purchasing it. The author also has his reservations about using Coinbase, however I personally am going to use this site to buy Ethereum. It is another cryptocurrency. If you’re interested in forming an investment group with me, then contact me.

http://www.marketwatch.com/story/7-money-making-lessons-from-the-richest-man-who-ever-lived-2017-05-02

Jacob Fugger was a German banker who financed kings, explorers, bishops and popes — and along the way made the biggest fortune ever amassed by a business person. The grandson of a peasant, he persuaded Leo X to legalize for-profit lending. One of his money-making schemes provoked Martin Luther to write the 95 Theses and kick off the Reformation. He played kingmaker in the 1519 election for Holy Roman Emperor. Jacob (Jakob in German) Fugger and his money gave the vote to Charles V of Spain and put Charles atop an empire as big as Napoleon’s. Fugger was worth about $400 billion in current dollars at the time of his death in 1525 — or 2% of Europe’s GDP at the time. (John D. Rockefeller was close in dollar terms, but his wealth equaled a smaller part of the U.S. economy.) Here are some of his secrets: invest when others fear, be indispensable, know the facts, know the numbers, get a good education, keep cool, and give something back. It’s best to not let fear or analysis-paralysis stop you from making a move when it comes to investing into your future. Do you have a vision? Do you have a mission? Do you have it written out? Be indispensable not just in your work place, but in your life. If you have integrity then people will trust in you and be willing to help you. Do what you say and say what you do, but make sure you think before you speak. Knowing the facts and the numbers will help you stay grounded. Getting a good education will help you draw out the person you are destined to be. Study what you love even if it’s for free, but think about how can you turn it into an income generating asset. How can it generate passive income or any form of income? Keep cool and use your will to stay focused on your plan whatever it may be. However, in the end, look at everything through the lens of eternity and legacy. There’s no sense in amassing great wealth with no plan on how you can help humanity. Fugger is best known as the creator of the Fuggerei, the world’s first affordable housing project. He thought anyone who worked deserved to have a roof over their head. Rent came to one quarter the market rate. The Fuggerei remains in operation and is the largest tourist attraction in his home city of Augsburg. Greg Steinmetz is the author of “The Richest Man Who Ever Lived: The Life and Times of Jacob Fugger.” I encourage you to read a book on a topic that interests, and a topic that is challenging to read to keep feeding one of your greatest assets: your mind.

If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about the self-lending principle in the mustard seed section.

For this week, I’ve included MOTIVATIONAL VIDEO – LIVE LIKE A KING from MulliganBrothers 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

May 10, 2017

Items in italics are direct quotes from the articles below

http://www.investopedia.com/financial-edge/0412/5-tips-on-when-to-sell-your-stock.aspx

Buy recommendations are prevalent and stem from a wide variety of sources, including investment newsletters, analysts, stockbrokers and investment managers. However, few offer much advice on when it is best to sell a stock. Here are five tips on when it might be time to sell. It hits your price target, a deterioration in the fundamentals, a better opportunity comes along, after a merger, and after bankruptcy. Obviously selling a stock when it doubles is a good idea, but when you are selling it when it doubles you are saying that the company is undervalued by 50%. I’ve said in previous blogs that understanding the numbers is important. The reason you should understand the fundamentals is to save yourself from losses when it looks like a company is deteriorating. Always look for better opportunities and factor in the opportunity cost. Take the time to read the final tips, but also consider how these tips factor into your investment portfolio. What is your asset class? Where is your focus? What lens are you looking at your life through?

http://www.businessinsider.com/how-to-stop-burnout-before-it-ruins-your-professional-life-2017-4

Hard work is as American as apple pie. We pride ourselves on pulling 12-hour days — getting in a workout before heading to the office before running to the PTA meeting and making it home in time for the evening news. Being stellar at the office, exceeding expectations, and climbing the ladder are all a part of the American dream. Until suddenly you hit a wall. You’re mentally and physically exhausted. Going through the motions day in and day out, forgetting self-care and ignoring pleas from friends to “slow down.” You are burned out. This article is a reminder of the dangers of stress on our daily life. Whether you have an educated background or not, you will find yourself in a stressful work environment. Stressful jobs contribute to 120,000 deaths each year and cost U.S. businesses up to $190 billion in health care costs , according to a 2016 paper from researchers at Harvard Business School and Stanford University’s Graduate School of Business. Regardless of age, American workers are unwilling to take vacation time, because they want to protect their job or they feel like they must keep up with the pace of work. “Burnout is primarily caused by systemic factors in workplaces,” says Chicago-based clinical psychologist Dr. Adia Gooden. “Jobs that put more pressure on employees without support and useful feedback are more likely to see employee burnout.” Here are six keys to spotting burnout: know the signs, see how the office or work environment impacts you and others, consider how technology plays a role, know that workouts help but only so much, when to speak to management, and seeking professional help.

Research shows that burnout has three dimensions:

  • Emotional exhaustion: Feeling used up and spent; sometimes physically and mentally, as well. You may have trouble sleeping, get sick often, and become irritated at the drop of a hat.
  • Depersonalization: Feeling alienated and disconnected to others at work.
  • Reduced personal accomplishment: Feeling apathetic and losing confidence in yourself and your abilities at work. Your capacity to perform is compromised.

Be mindful of the workload of your environment, and know when to set boundaries around your time away from work so work can’t creep into your personal time. It is healthy to work out, but it’s also important to eat properly, and to engage in practices that allow you to unplug from work even during the work day. Personally, I’ve taken up listening to motivational videos, or relaxation music through YouTube. For me, these strategies come alongside my primary response to exhaustion which is prayer, reading the Word, and listening to worship music. What works for me may not work for you but if it helps you engage in the principle of rest then it’s helping you pay back your time deficit. Build into your life time margin so you can truly rest and replenish your strength, and in doing so you may see a problem from a different point of view and solve it.

For this week, I’ve included Arnold Schwarzenegger – THE STORY SO FAR – Gym Motivation – Motivational Speech from MulliganBrothers 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

March 29, 2017

http://www.inc.com/jeff-haden/the-awful-truth-about-getting-rich-that-no-one-wants-to-hear.html

Many people want to be incredibly wealthy. (How you define “incredibly wealthy” is of course up to you–my “incredibly wealthy” may seem like pocket change to Floyd Mayweather, Jr.) Many people don’t hope to achieve that goal…but many people do. And there’s certainly nothing wrong with that. But you will never become incredibly wealthy by working for someone else. And you will never become incredibly wealthy by living a “safe” (more on that in a moment), “positive work-life balance,” time-clock-punching professional life. If you want to have a certain amount of money in the bank, then you are less likely to have it if you’re working for someone else. Even people with advanced degrees will earn an average income of less than six figures. When you work for someone else, you implicitly accept a limited upside and unlimited downside. Unless you somehow manage to be the employee version of a unicorn, you will never, ever become incredibly wealthy. In 2014, it took $127 million in adjusted gross income to make the top 400. (That sounds like a lot, but it just barely got you in the door. The average income of everyone on the list was $317 million.) Those are fun stats to whip out at parties, but what matters is how the top 400 made their money:

  • Wages and salaries: 4.4 percent
  • Interest: 4.2 percent
  • Dividends: 10.9 percent
  • Sale of Capital Assets: 65.2 percent
  • Partnership and S Corp Net Income: 16.2 percent

The author points out the way to become incredibly wealthy is to start your own business that can be scaled to a significant size. Unless you’re an actor, or musician, or athlete–in which case you’re still an entrepreneur, because you’re in the business of you–starting a successful business is the only realistic way to become incredibly wealthy. If that is your goal, you’ll need to start yours. Today.

http://www.investopedia.com/articles/fundamental-analysis/09/value-investing.asp

Value investing, and any type of investing, varies in execution with each person. There are, however, some general principles that are shared by all value investors. These principles have been spelled out by famed investors like Peter Lynch, Kenneth Fisher, Warren Buffet, John Templeton and others. In this article, we will look at these principles in the form of a value investor ‘s handbook.
Value investors agree that you should buy businesses and not stocks. Investors should look at the fundamentals of the company and not the trends in the stock price. You wouldn’t pick a spouse based solely on his or her shoes, and you shouldn’t pick a stock based on cursory research. You have to love the business you are buying, and that means being passionate about knowing everything about that company. You need to strip the attractive covering from a company’s financials and get down to the naked truth. Many companies look far better when you judge them on basic price to earnings (P/E), price to book (P/B) and earnings per share (EPS) ratios than they do when you look into the quality of the numbers that make up those figures. It’s best to invest in companies that you understand vs. being attracted to a company’s earnings. To quote Buffett: “look for three qualities: integrity, intelligence, and energy. And if they don’t have the first, the other two will kill you.” You can get a sense of management’s honesty through reading several years’ worth of financials. How well did they deliver on past promises? If they failed, did they take responsibility, or gloss it over? A good manager will be focused on growing the company and not just its market value. Growth in the company increases the value to the shareholders. If you do happen to find undervalue stocks and if you have the liquidity available, then go ahead and buy as much as you can. Keep in mind that the market only matters when you enter or exit a position. When you sell an investment, you expose your portfolio to capital gains and usually have to sell a loser to balance it out. Both of these sales come with transaction costs that make the loss deeper and the gain smaller. By holding investments with unrealized gains for a long time, you forestall capital gains on your portfolio. The longer you avoid capital gains and transaction costs, the more you benefit from compounding. Value investing requires a lot of patience and discipline, but when you do so, the potential payoff is large. Ask yourself how does this fit into my personal investing strategy? Do I like investing in paper assets, real estate, businesses or commodities? What is my concentration level? What is my exit strategy? Most importantly what is my legacy? When you look at your life through the lens of legacy you won’t lose focus on your vision and goals.

Items in italics are direct quotes from the articles above

If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about the self-lending principle in the mustard seed section.

For this week, I’ve included Be Powerful –motivational speech video – T.D. Jakes from the Motiversity 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