Invest like a young Warren Buffett
March 15, 2010
The following article contains a blueprint. The exact formula’s and functions to use with a stock screener to find stocks a young Warren Buffett would buy. These stocks are not just cheap, they have low debt levels, high quality management and strong profit margins.
A lot of us wish we could invest like Warren Buffett — and for good reason. Buffett and his partners acquired control of Berkshire Hathaway (BRK.A, news, msgs) in 1965. Since then, by taking positions in publicly traded companies such as McDonalds (MCD, news, msgs) and buying other companies outright, Buffett transformed Berkshire into, in effect, a closed-end mutual fund.
The Price Sales Ratio Revisited
March 11, 2010
The Price/Sales Ratio (PSR as commonly understood, is simply the subject company’s market capitalization divided by its most recent twelve months sales. The PSR was first popularized in Super Stocks in 1984 by Kenneth Fisher, the son of legendary investor Phillip Fisher. In subsequent years, studies have demonstrated the superiority of price/sales over price/earnings.
To be sure, Fisher never advocated the use of price/sales as a stand alone indicator of value. It is just one tool to use when in conjunction with other tools to estimate a company’s value. The PSR is particularly useful when looking at a company without earnings as the more commonly used P/E ratio is meaningless.
Here Comes Dow 9,600, S&P 500 at 1,042 and Some Investment Ideas
June 6, 2009
Sometimes accepting “what is” happens to be counter intuitive. That’s the way it feels right now with the DJIA above 8,700 as I write and the S&P 500 at 945. The trend for this bear market rally is powerful and it will be meaningful to see how far it goes. Read more
Another Bubble in the Making?
May 27, 2009
The market has staged a very impressive rally since the March 6th low. At that time the S&P bottomed at 666 and is now around 900. This massive rally has occurred in just two and a half months. Some talking heads in the media are now saying that this is the start of the next bull market. Many call a move of 20% or more a bull market and perhaps
by that definition they are correct. However, the decline seen last year should then be called a ‘mega bear’ as the S&P went from 1576 to 666 in just 18 months. Read more
It Took Some Time, But We May Have Pulled Through
May 6, 2009
Since my last post on 4/12/09 the S&P 500 has continued on it’s upward rally. We were able to break through the resistance around 878 and were able to see consistent higher lows which is the main indication of an uptrend. The [VIX: 0.00, N/A (N/A)] shown in the second chart below is also indicating that the market may return to normal volatility levels. While the technicals of the market look to be heading for higher highs I would still advise caution, as I am not completely convinced that this rally will hold given the current amount of mortgage’s including balloon rate’s that will adjust this summer. I will also be careful of the extreme inflationary environment that we will be exposed to due to the current administration, as it is possible that the market’s rally is only reflecting future inflation and not true market growth.
They Have to Blame Someone!
April 24, 2009
Have you ever noticed that a day does not go by without the media pointing to a reason why the market traded higher or lower on a particular day? According to the media, there is always a reason for a move higher or lower. When the market moves lower, short sellers are typically blamed for the downward pressure. Is such a culpability present, or has the common man’s perspective of short-selling been seriously distorted? Read more
The Moment of Truth: Can the Bulls Pull Through?
April 12, 2009
Taking a look at the S&P, you can see that we are gaining ground on a rather strong looking uptrend. We have had two significantly health pullbacks since the March bottom. We are now approaching the moment of truth resistance at around 877. If we are able to break through this resistance, we will not encounter new resistance until the 950 level and then 1000. This could be the recovery that Wall Street so desperately needs. However, if this resistance holds we are looking at possibly returning to the March lows.
Google Is Coming Back With The Market
March 24, 2009
Looking at the technicals of Google [GOOG: 563.18, 0.00 (0.00%)], we can see that Google is currently in the start of an uptrend. This is shown by the higher lows on both the daily chart and the weekly chart shown below. Google has bottomed out at 247 in November of last year. Since that time, it has gone to its current price of 353. I think it is a safe bet that Google will make a climb to its next resistance level of 382. If the stock is able to close above this level then we should see Google continue to move up to at least 411.
Market’s Short Term Recovery Maybe Over
March 17, 2009
The market’s temporary recovery may be just “temporary.” With the market closing positive for four consecutive days in a row it is not surprising that the market had a slightly down day. However, today was much more significant, not only do we have the possible start of a bearish candle stick reversal pattern, which would be confirmed with one more day of bearish trading, but more importantly we have this market weakness right as we near the 50% retracement mark from January and February’s highs as you can see in the first chart below. As you can observe from the second chart below, this pattern happened in the past and was followed by the market falling to its current bottom of around 666. I would consider these chart patterns very significant and expect the market to follow through to the downside and may even make a new low.
Time to Stock Up on Some Gold
March 9, 2009
With Obama’s outrageous stimulus plans where the federal government is going to give out billions of dollars of handouts to the demand side of the economy, its no wonder gold is gaining ground while stocks have been falling. However, the question remains when is it time to buy? The answer is now. Gold has been consistently in a uptrend since October of last year this is shown in the chart of a major gold ETF [GLD: 108.36, 0.00 (0.00%)] below. As you can see, gold is making a short short term pull back which signals a time to buy. With more talks of spending, including a world wide stimulus package, there is only further pressure on leading countries currencies such as the U.S. Dollar. These inflationary pressures may push gold to break the 2008 highs of around 1056.
