In this article, I will discuss how you can accurately estimate the downside risk of a stock. Downside risk is the worst case scenario for a stock. It represents what could happen to a company's stock price if it does not perform up to investor expectations. Therefore, knowing how to determine the downside risk of […]
In this article, I will cover how to use dividend discount models to value dividend stocks in the stock market. Although the discounted cash flow valuation (DCF) model may provide a better means of determining a company's intrinsic value, dividend discount models remain a useful tool for estimating value, particularly with companies that regularly use […]
In this article, I will discuss the importance of stock buybacks for investors, what positive or negative implications they may have for investors, and what things investors should look for when analyzing companies that do stock buybacks. In short, a stock buyback, or share repurchase, is when a company purchases shares of their own company, […]
In this article, I will discuss how to identify an economic moat, a distinct/durable/sustainable competitive advantage a company has over others in the same industry or sector. Identifying an economic moat is an essential part of the analysis process for value investors looking to make a long-term investment. Without a strong economic moat, companies are […]
In this article, I will explain the Weighted Average Cost of Capital (WACC) and walk through an example on how to calculate the WACC with a real company in the stock market. Afterwards, I will discuss why the WACC is flawed as the discount rate, and what individual investors can use instead to discount their […]
In this article, I will discuss the importance of Warren Buffet's circle of competence for investors. I will also explain how you can identify its boundaries, how you can expand your circle of competence, and how value investors can use this information to make smarter investment decisions. Put simply, the "circle of competence," a term […]
In this article, I will cover how interest rates affect the economy and how changes in interest rates can affect the decisions and factors consumers have to account for before making an investment decision. For the past decade, those living in the United States have been accustomed to low, almost zero interest rates. Regardless, the […]
In this article, I will discuss the importance of the yield curve for investors, what it really means when it flattens and inverts, and what steps investors can take when the yield curve changes shape. In short, the yield curve is a curve that many analysts reference when discussing the economy. In reality, the yield […]
In this article, I will discuss the 10 crucial investment principles you need to have as a stock market investor. By the end of this article, you will have gained a broader understanding of the stock market and will be able to apply this knowledge to improve your long-term returns. Through looking at what the […]