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cintrix, also do you know if the financial advisors will take commission from me if I were to go in and speak with them rather then enrolling over the phone or online?
cintrix, what you're saying is, don't use 401k profits to trade stocks? I plan to keep 401k investments separate from stock investments. If I do invest in a 401k, I wouldn't draw money from it tell retirement. Haha, I understand where you're coming from. I'll do my best to save as much as possible. I thought we were just talking about 401k's though. Are mutual funds similar? I'll ask if there is a limit on the amount I can buy. What do you mean by vested? I'll ask them that question also.
I was also wondering if I should talk to someone face to face about this? There are two Merrill Lynch branches here in my city. Do you think I should schedule an appointment with one of them? I would feel much better speaking to someone face to face rather then talking to someone over the phone.
Thanks for your help.
Good evening! I have the opportunity to receive financial benefits through my employer. This is the first employer to offer me this option. I'm overwhelmed and looking for some guidance and a point in the right direction.
1.) I currently use Scottrade's investment service. Though my employer uses Merrill Lynch investment service. Would Merrill Lynch be willing to transfer my investments to Scottrade? Would I be better off pulling investments from Scottrade in the future and transfer it to Merrill Lynch? Could anyone tell me more about Merrill Lynch's investment platform and how it compares? It's not important if investments are separate, though I would prefer my investments be together if I can benefit. I like Scottrade because they have branches, and I can speak to someone in person. I also enjoy the education seminars. They have a reasonable trade fee and the platform is simple to use. Could anyone chime in?
2.) I'm only 21 and I don't feel retirement planning is best for me right now. I'm more interested in risky investments such as stocks. Though my employer matches 401k's investments, so I'm interested. Could anyone tell me more about 401k's and this subject in general?
3.) I'm also subject to a discounted stock purchase through my employer. I see this as a good and bad. Good being, I can purchase the stock at a percentage cheaper then PPS. Bad being, since I have investing knowledge, I see the bad and good in my employer more so then the average employee. I feel I have mixed emotions about how the company is run meaning, I see the dirt and grime. It could effect my decision. Any help here?
4.) What questions and information should I ask from my employer?
If you have any resources or you can point me in the right direction, I would greatly appreciate it.
Thanks, Gulley
Good evening! I have the opportunity to receive financial benefits through my employer. This is the first employer to offer me this option. I'm overwhelmed and looking for some guidance and a point in the right direction.
1.) I currently use Scottrade's investment service. Though my employer uses Merrill Lynch investment service. Would Merrill Lynch be willing to transfer my investments to Scottrade? Would I be better off pulling investments from Scottrade in the future and transfer it to Merrill Lynch? Could anyone tell me more about Merrill Lynch's investment platform and how it compares? It's not important if investments are separate, though I would prefer my investments be together if I can benefit. I like Scottrade because they have branches, and I can speak to someone in person. I also enjoy the education seminars. They have a reasonable trade fee and the platform is simple to use. Could anyone chime in?
2.) I'm only 21 and I don't feel retirement planning is best for me right now. I'm more interested in risky investments such as stocks. Though my employer matches 401k's investments, so I'm interested. Could anyone tell me more about 401k's and this subject in general?
3.) I'm also subject to a discounted stock purchase through my employer. I see this as a good and bad. Good being, I can purchase the stock at a percentage cheaper then PPS. Bad being, since I have investing knowledge, I see the bad and good in my employer more so then the average employee. I feel I have mixed emotions about how the company is run meaning, I see the dirt and grime. It could effect my decision. Any help here?
4.) What questions and information should I ask from my employer?
If you have any resources or you can point me in the right direction, I would greatly appreciate it.
Thanks, Gulley
nemo_bad, your not the first person to tell me that. Thanks your advice.
ison929, I'll have to check the filings out. Being new to the stock market, I plan to learn how to read filings soon. Though I might start with a different company first. I looked at BAC's filing and I have never seen such a long, detailed filing. Definitely not a filing to learn from.
ison929, July 14 I believe is the date released. What do you think the outcome will be?
I am a new to investing. This is the first stock I chose to buy. It took me a little over a month to pick the first stock I wanted to invest in. I'm confident my due diligence will pay off.
Good luck, Gulley
lowtrade, to better understand. For an example, the information provided on Yahoo! Finance...
Google (GOOG)
Current Ratio (mrq): 4.74
1.0 is breaking even.
.9 or under is more debt then than liquidity.
1.1 or high is more liquidity then debt.
Do I understand this part correctly?
Total Debt/Equity (the term used on Yahoo! Finance) or The Debt Ratio or Debt/Assest Ratio (mrq): 9.77
This works the same way as above, once again...
1.0 is breaking even.
.9 or under is more debt then than liquidity.
1.1 or high is more liquidity then debt.
Do I understand this correctly?
I can't stress enough how helpful your knowledge has been. Thank you very much for being patent and clear, I'm grateful.
lowtrade, I'm not understanding the difference between Current Ratio and Debt Ratio. After reading about them, they sound like the same?
lowtrade,
"As for why 1 is undervalued and another over valued, I'm not sure where you found that info. I thought fundamentals were only given for "A"s. And the "A"s have a BVPS of 120525 with a stock price of 168200."
Your numbers are correct. I thought the fundamentals for A's would be the same for the B's. I thought this because they both share the same balance sheet and shares combined. When I saw this, I assumed that the BVPS for both we're the same, thinking B's were very undervalued.
lowtrade, thank-you for your help. So I need help understanding. So BRK-A is overvalued according to the Book Value Per Share. Though BRK-B is undervalued according to the Book Value Per Share. I know both are issued from BRK and BRK-B is non-voting. Though are these statements still true according to the Book Value Per Share? For example, say I was interested in buying BRK-B. Which Book Value Per Share is correct? Are the Book Value Per Share's different just because their non-voting?
Thanks, Gulley
I need help understanding. So BRK-A is overvalued according to the Book Value Per Share. Though BRK-B is undervalued according to the Book Value Per Share. I know both are issued from BRK and BRK-B is non-voting. Though are these statements still true according to the Book Value Per Share? If I'm interested in BRK-B I should follow the BRK-B Book Value Per Share correct?
mokew, I'll just make do with the information that they provide, thanks for your help!
mokew, I have tried this site. It seems this site is just about as reliable as Yahoo! Finance if not less reliable. When looking for insider trades.
lowtrade, thank-you very much for your response. I have another question for you. As a beginning value investor, I'm also looking at insider trading. The key things I'm looking for, is weather insiders have been buying or selling (more specifically those in corporate). Insiders from outside the company, such as institutional and mutual fund holders. Preferably only looking at those who hold +10% and have bought or sold in the past 3 months. Anyway, hoping were on the same page now. I'm having trouble finding this information. So far, the most helpful resource has been Yahoo! Finance, but doesn't seem very reliable (especially foreign companies). I'm could look it up on Edger, though it's a bit hard for me to dig in and understand. So is there an easier way to find this information?
Thanks again for taking your time to share your knowledge!
If anyone could help me. On the subject of earnings yield. Since earnings yield is the inverse of P/E ratio. Is it still important to use it? Other words, if company A has a P/E ratio of 1 and company B has a P/E ratio of 2. Is it possible that company B has a lower earnings yield then company A? Since the lower the P/E ratio, the higher the earnings yield?
Thanks, Gulley
If anyone could help me. On the subject of earnings yield. Since earnings yield is the inverse of P/E ratio. Is it still important to use it? Other words, if company A has a P/E ratio of 1 and company B has a P/E ratio of 2. Is it possible that company B has a lower earnings yield then company A? Since the lower the P/E ratio, the higher the earnings yield?
Thanks, Gulley
Hey Rick, how's it going?
It's dunzo!
cintrix, so if this is the inverse. Is it still important to use it? Other words, if company A has a P/E ratio of 1 and company B has a P/E ratio of 2. Is it possible that company B has a lower earnings yield then company A? Since the lower the P/E ratio, the higher the earnings yield?
cixtrix, I found what I believe three value stocks that I'm digging deeper in. Berkshire Hathaway Inc. (BRK-B), Sony Corp. (SNE) and Met Life Inc. (MET). I'm using the tool you gave me, by using Yahoo Finance to look up most of the information (which has been a big help). I'm now looking for the earnings yield. Though I can't find it in the "Key Statistics". Is there another word or abv. for earnings yield?
cixtrix, very good read. I have been busy with school, so I haven't been able to look at the key statistics for the list of companies I wrote down. Though the first thing on my list is to find a few companies that's trading %30 under book value per share. Afterwards I plan to look at other factors including P/E ratio, earnings yield, insiders, current ratio, expenses, revenue, profitability, comparing to industry and dilation. Seeing which looks the best out of the three.
cixtrix, this is perfect! Of course your not lazy. Work smarter, not harder. If I have any further questions I'll be sure to ask, thanks!
cintrix, I understand the difference now. Though something is wrong with the formula that I showed in my earlier post for finding book value. Using this formula shows all companies extremely overvalued. I found the formula from Investopedia. What am I doing wrong? I know it's not my math. It has something to do with what's included in the asset and liabilities figure. Something should be excluded. I've found other sites that don't include certain figures like tangible assets or long term debt. But all sources include and exclude different numbers. I don't know which source is correctly calculating book value. Understand where I'm coming from?
cintrix, so if I understand correctly. Market value of equity doesn't take into account the company's growth potential? Sorry for being difficult.
one4theroad, you lost me. I'm very sorry. Maybe an example would be helpful, if possible please?
cintrix, I meant value investor, not growth. Sorry for any confusion.
cintrix, as a growth investor. To make sure we are clear. I believe I'm looking for the PPS the stock should be trading at based on just it's net worth. For example...
Assets $100 - Liabilities $30 = Net Worth $70
If this company were to close down today, it would be worth $70.
Net Worth $70 / Outstanding Shares 5
This company is valued at $14 a share, but the current price per share is $7. Making this company under valued, by $7
Am I correct on this part? This is Market value?
So to follow up on your response. In this formula, I need to use long-term assets so I also need to use long-term liabilities. I have been using both long term numbers and haven't found an under valued stock.
I was wondering if someone could help me on the subject of book value? After using the formula on over 25 stocks. I realized that I may not be using the formula correctly. The formula was telling me all of the stocks were extremely overvalued. I believe problem might be factoring assets and liabilities.
I got this formula from Investopedia. The formula I have is...
(Assets) – (Liabilities) = (Net Worth)
(Net Worth) / (Shares Outstanding) = (Book Value)
It wasn't clear weather it should be current and/or long term assets and liabilities. I have been factoring both current and long term.
Thanks, Gulley
Good afternoon! I am novice when it comes to investing. I was wondering if someone could help me on the subject of book value? After using the formula on over 25 stocks. I realized that I may not be using the formula correctly. The formula was telling me all of the stocks were extremely overvalued. I believe problem might be factoring assets and liabilities.
I got this formula from Investopedia. The formula I have is...
(Assets) – (Liabilities) = (Net Worth)
(Net Worth) / (Shares Outstanding) = (Book Value)
It wasn't clear weather it should be current and/or long term assets and liabilities. I have been factoring both current and long term.
Thanks, Gulley
bigman7100, 98 days later. Your pick is behind the top four in PPS growth in the auto parts retailer industry. Although all four companies are showing great growth, Pep Boys (PBY) is the winner at the time, up with almost %13 since your post.
Pep Boys (PBY) - +13%
Advanced Auto Parts (AAP) - +10.50%
Autozone (AZO) - +9.50%
'O'Reilly Automotive (ORLY) - +9%
The chart that seems to match 'O'Reilly Automotive the most is Autozone. Very impressive to say the least. I like all four companies, I worked for 'O'Reilly and truly admire how they operate from my experience (as I was the one who started 'O'Reilly's message board). Though out of the top four, I like Pep Boy's the most.
In my opinion, Gulley
Ichauway, I agree. I'm on the prowl for my first stock to invest in. I have only looked at less then 15 companies and this is by far the worst I've seen. Though I will keep it in my watch list. In my opinion, this should see some major dilution or correction soon. Which ever comes first.
trendfollerpl, I'm a beginning investor myself. I also noticed their equity today when looking at their balance sheet. It's roughly 1 billion in the red. With my lack of knowledge. In my opinion.
One point I can share with you, is that this is a big retailer in America. Victoria Secrets is the go-to for women's undergarments. Bath & Body Work's is very popular for those who use lotions and such. If I find the time. I'll do some more research myself, I'm very interested. As this is the first company that I have seen equity in the red.
Gulley
Now that I mostly understand a strategy for entering the market. I need to learn more about strategies exiting. I found this link to be a little helpful...
http://www.investopedia.com/articles/trading/04/092904.asp
Are there any more resources I can read about this that you think would be helpful?
Thank-you, Churak.
Thanks, greatly appreciate that.
Well, I wasn't being honest with you cintrix. I wanted to keep this out of discussion, though I will explain. Soon will be the first stock I personally choose to invest in. I have only bought and sold one stock, which a friend recommended me. I was naive investor at the time. I bought into it with no clue about the business. When I wanted to learn more about not only the company, but the market itself. He told me not to worry and that I'll make a great return with the stock. We no longer communicated, more on his part. As to why, I don't know. Though an already long story short. I didn't know what an exit strategy was and sat on it longer then I should have. In the end I lost 80%. I do understand your first paragraph about blind investing. I learned my lesson, I'm putting it behind me and starting fresh on my own.
I would eventually like to learn all of the different strategies of investing. Though I'm a broke 21 year old college student, who isn't giving up on the market after my past experience. I barely have enough left where I'm forced to buy stock from one company, I can't diversify. At this point in time, I feel value investing is the best choice. It's basic, most simple for me at this point and it seems to hold the least amount risk of any other strategies.
I do have questions regarding the links you provided...
1.) When it comes to calculating book value or net current assets per share. One of the numbers needed is liabilities. Should I include shareholder's equity into the liabilities?
2.) Since book value is an inverse of earnings yield, is it important to look at earnings yield when comparing stocks or vise versa? Since their both coming from the same numbers.
3.) This question goes along with the question above. Net current assets per share seems to also be the inverse of book value?
I believe that's all the questions I have for now.
I thought I would buy a stock a few days after selling the first stock I held. Though I'm glad you're here to help with what you can. I feel more confident and I'm not even sure if I want to buy in next week. I want to come up with an exit strategy before making a move.
Once again, thank-you very much for replying cintrix,
Gulley
Sorry for the slow reply. I wanted to be sure to read all of the links at once, instead of bits and pieces because of my horrible reading comprehension. Firstly, these links were very helpful. It seems to me this is the best, basic strategy for any beginning investor in my opinion. Then from there, your welcome to branch out. After reading, I have no current questions on this subject. Though I'm sure when I break it down, I might request further explaining. I'm realizing, more then ever before. That there are no set guidelines to picking a stock for everyone. For each strategy of investing, presents endless strategies for each individual. Now my current goal is to choose what personal guidelines I want when deciding the value of a stock and weather to buy or wait for a better time to buy.
Thank you cintrix very much for pointing me in the right direction.
So I came to the conclusion that I am a value investor. Though I'm confused about how investors find intrinsic value. Could you please offer any help on this subject?