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Finding great companies for investment – Financial statements of a mediocre company
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Previously, we looked at analyzing the income statement, the cash flow statement, and the balance sheet for a great company – the Coca Cola Company. Using these tools, we looked at the kinds of measures we want to see in an outstanding company for addition to our star list for investing. Now, we will look
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Finding great companies for investment – Balance sheet analysis
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Previously, we looked at the income statement and the cash flow statement. Using these tools, we looked at the kinds of measures we want to see in an outstanding company for addition to our star list for investing. We will continue this exploration with the balance sheet, and again we will use the Coca Cola
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Finding great companies for investment – Cash flow statement analysis
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Analysis of a great company – the cash flow statement Previously, we looked at the income statement and the kinds of measures we want to see in an outstanding company for addition to our star list for investing. We will continue this exploration with the cash flow statement, and again we will use the Coca
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Finding great companies for investment – Income statement analysis
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In order to start developing your star list of great companies, I want to do a series which gives you the tools you will need to screen and vet companies for your list. To do this, you will rely on analysis of the income statement, the cash flow statement, and the balance sheet. These key statements
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Buy and hold enhances portfolio returns
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In the last post, we showed how just the tax efficiency of low turnover buy and hold strategies can make your portfolio outperform. This occurs even if the pre-tax return is the same between short and long term trading strategies. Now we are going to examine how very low turnover in your portfolio can cause
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Tax efficiency is critical to investing returns
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One big reason why buy and hold works is because it is one of the most tax efficient investing strategies you can have. For many people, taxes are one of their top 3 expense categories throughout their working and investing life, so reducing this expense as much as legally allowed is critical to growing your
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Predicting long term future stock returns – 2024 Q2 update
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In previous posts, I have shown how the equity allocation of investors is outstanding at predicting 10 year annualized future stock market returns. While this information cannot be used to time the markets in the short term, it may be useful for long term planning considerations, such as retirement, deciding on a larger downpayment on a home
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Predicting safe withdrawal rates for retirement
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In the last few posts, we have shown some techniques for predicting nominal returns and real returns. We have also looked at simulating safe withdrawal rates in retirement with various stock / treasury bond allocations and lengths of retirement. Now it is time to put all of this together and develop a model for predicting
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Safe withdrawal rates in retirement – an update to the Trinity study
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The Trinity study is a famous study that looked at how much one could draw from savings in retirement while invested in stocks and bonds, without completely depleting the portfolio over a period of time. The safe withdrawal rate, as it was called, is the percentage of the invested savings that could be withdrawn in
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Predicting long term real returns in the market
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We have made attempts to predict long term nominal (before inflation) returns in the market with great success using the equity allocation of investors. However, in order to predict what safe withdrawal rate we can maintain in retirement, we need to be able to predict real returns (that is, returns after inflation). The reason for