Normally I am a big fan of simplifying investment concepts, because I think that people who peddle investment information try to hold onto their relevance by making topics more difficult than they have to be. Big investment companies talk about the massive number of metrics they look at without telling you that most of the…
Does a Dividend Strategy Make Sense if you are Young?
The answer is definitely yes. Long-term dividend stocks using a dividend reinvestment program (DRIP) can be a fantastic strategy for someone who is young. I did not find this question too surprising, though once I am done answering it you will realize that basic math has already told us that dividend stocks are for the…
Blitz: Extensive Evidence Against a Theory is Not Strong Evidence Against the Theory
You are not alone if the title hurt your head. I think my eyes are bleeding looking at it, and I had to pop two painkillers. I was flipping through a book at Barnes & Noble (shout out) and I ran into some math regarding probability through time. This article drifts all over the place….
Blitz: The Allure of Turnaround Plays
Right now we have Alcatel-Lucent Mania here at The Market Archive. This is due in no small part to the release of a company profile that talks a ton about anything and everything I know about Alcatel-Lucent. So why turnaround plays? Some of my favorite stocks are turnarounds. Am I a masochist? Do I have…
Efficient Market Hypothesis
When considering asset strategies such as Asset Allocation theory, there are other, highly controversial and disputed theories in existence. In fact, these theories have been developing since the 1860s, but have gathered pace since the middle of the 20th century and are constantly being re-examined. One of these is Efficient Market Hypothesis, which has its…
Asset Allocation Theory
Asset allocation theory is not everybody’s piece of cake, but it is a system worth considering before making decisions on how you will invest your money. Asset Allocation theory is an attempt to balance risk through the adjustment of percentages of different types of investment in a portfolio. This allocation of assets is determined by the investor’s…
What Is An Initial Public Offering (IPO)?
Companies do not just start on stock exchanges. They are formed by private parties as a private company. It is only after they establish their business and hopefully prove themselves that they make an initial public offering or an IPO. I do not mean to sound condescending, but I’ve learned that even people who are…
Options 101 – Types of orders in Options
If you’re familiar with stock trading including short selling you know there are multiple kinds of orders. If you are not familiar then you might only be familiar with buy and sell. Well with stocks there is buy, sell, sell short, and sometimes (though not always) buy to cover. Not even sure I’ve seen the…
Using the Price to Book Ratio and Free Cash Flow to find Stable Undervalued Stocks
A price to book ratio below one means that the market has attached a discount to the assets of a company. It that for every dollar spent buying a piece of the company, the amount bought is greater than that dollar. There are various other definitions and metaphors that are apt, but the simplest explanation…
Dividends are Fantastic, Own them and Love them
Dividends are the best. They are a great way to earn a return from the safest stocks. Frankly, even the safest stock out there is subject to a beating like the one we had in 2008. Think of dividends like your risk premium. You take the risk of your capital, and the company pays you…
