Nuggets of Investing Wisdom

Nuggets of Investing Wisdom

A website for serious investors in common stocks

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Chart distortions that drive me crazy

  • by Rodney Smith
  • Posted on March 7, 2021March 7, 2021
  • Part 5: Asset Management

Going parabolic and other lies

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Do investors need to identify and invest in future FAAMGN stocks?

  • by Rodney Smith
  • Posted on February 28, 2021February 28, 2021
  • Part 4: Principles of Operation

Today’s FAAMGNs, that is today’s ‘vital few’, will not be the ‘vital few’ 20 years from now

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Buying tactics for common stocks

  • by Rodney Smith
  • Posted on February 21, 2021February 21, 2021
  • Part 7: Building and Managing a Portfolio

We give up on trying to attain perfection or ascertain when the bottom has been reached

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Investors can counter management short termism

  • by Rodney Smith
  • Posted on February 14, 2021February 15, 2021
  • Part 6: The Hallmarks of Superb Businesses

63 per cent of respondents said the pressure to demonstrate short-term financial performance had increased over the last five years

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Is the Federal Reserve driving the stock market?

  • by Rodney Smith
  • Posted on February 7, 2021February 7, 2021
  • Part 1: The Field of Play

While the Fed had no explicit mandate to focus on the stock market, the effects of the run-up in prices seemed to me a legitimate concern

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How much riskier are stocks than bonds?

  • by Rodney Smith
  • Posted on January 31, 2021February 1, 2021
  • Part 5: Asset Management

In such an environment, many investors actually consider investments they are making are low risk when, in fact, they are higher risk.

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Heart of stock valuation: subtleties of free cash flow

  • by Rodney Smith
  • Posted on January 24, 2021January 24, 2021
  • Part 7: Building and Managing a Portfolio

If a company’s capital expenditures are simply maintaining the company’s position in its markets, it free cash flow may be unduly high

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The problem with analysts’ target prices

  • by Rodney Smith
  • Posted on January 17, 2021January 21, 2021
  • Part 7: Building and Managing a Portfolio

The sell side analyst’s target prices do not estimate fair value. DCF estimates do just that. Investors should not confuse the two.

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Expected future returns

  • by Rodney Smith
  • Posted on January 10, 2021January 10, 2021
  • Part 4: Principles of Operation

Today’s investor cannot tell what percentage gain in earnings, dividends and prices he may expect in the next ten years

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My investment plan for 2021

  • by Rodney Smith
  • Posted on January 3, 2021January 4, 2021
  • Part 7: Building and Managing a Portfolio

Plan for the worst. Hope for the best. And don’t agonize.

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