Posts by Andrew Stotz
Your Newborn’s College Education will Cost at Least $2,000 per Year
The cost of a US public university education for a child born today will be about $80,000. A parent could invest about $2,000 the year their child is born, and increase that contribution by 5% each year to make sure that child can go to university. They could do this by buying a broad market fund or ETF depending on what suits their situation, and contributing money every year.
Read MoreFinding Value in Today’s Slowing Consumer Sector
VIDEO BLOG: Though the consumer discretionary sector has been slowing, there is still strong and stable profitability in emerging markets.
Read MoreBusiness Managers and Owners should Look for Profitable Growth
In April I blogged about EPS Growth, and followed this with a post about profitability (Replace “E” with “A” to Truly Understand Business Profitability). Today, I focus on a combination of these profitability and growth measures, which I call “Profitable Growth”.
Read MoreUnilever Indonesia generates a 130% ROE
Unilever in Indonesia generates an amazingly high level of profitability, with a return on equity (ROE) of more than 100%. What’s more, this large-cap stock has low correlation with Western stock markets, low volatility compared with other Indonesian stocks, and strong earnings momentum
Read MoreReplace “E” with “A” to Truly Understand Business Profitability
If a company can generate a good net profit relative to the assets it invests in, its return on assets (ROA) is strong. ROA is a measurement that matches the way a manager thinks about business – What assets do I need? What do I get in return?
Read MoreSheng Siong Group Limited – a Singaporean Mid-Cap with Strong Momentum
This third largest supermarket chain in Singapore, Sheng Siong Group Limited, has 35 outlets and steady EPS growth. This mid-cap stock has strong profitability, low volatility, no debt and good price momentum, though this combination does not come cheap. I like the steady, defensive nature of its business and its slow rise in net profit margin over the past two years.
Read MoreInvest in EPS Growth – It Pays
Whether managing a business or investing in one, it is critical to focus on earnings-per-share (EPS) growth. This one measure tells almost the entire story of a business. My analysis of 8,000 companies across the globe shows that their combined EPS has been contracting by 3% per year over the last four years.
Read MoreDebating a Harvard Professor’s Criticisms of the Finance Industry
A recent article in The New York Times Upshot section by the Harvard economist, Professor Sendhil Mullainathan, titled, “Why a Harvard Professor Has Mixed Feelings When Students Take Jobs in Finance” was a weak attempt at arguing the case that finance professionals add little to no value to society and that people working in the industry are mainly carrying out immoral or illegal acts.
This is my reply.
Read MoreMajority of Investors Drive their Portfolios without a Diversification Seatbelt
It’s a choice that’s nearly a matter of financial life or death. Deciding the right number of stocks to hold in your portfolio is a balance between risk and return – too few and your risk is high, too many and you might as well own a broad market fund or ETF. Research shows that the average active investor owns only two! That’s far too low.
Read MoreProfit from Pessimism: Finding Value When a Company’s Outlook is Poor
My research covering 4,000 companies across the world shows that, over the past 22 years, financial analysts have been wrong in their earnings forecasts about 33% of the time.
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