Warren Buffett and Stock Market
warren buffett

Warren Buffett and Stock Market

As such, a stock price decline must imply the outlook is deteriorating, and vice versa. But stock prices move for all sorts of reasons, and many of them are unrelated to business fundamentals. And humans are emotional, they often over-react; psychological biases mean they often do the wrong thing at the wrong time. Consequently, stock prices […]

Retained Earnings
warren buffett

Retained Earnings: Warren Buffett’s Secret

One of the most important indicators of durable competitive advantage. Net earnings can be paid out as dividends, used to buy back shares or retained for growth.If the company loses more than it has accumulated, retained earnings is negative.If a company isn’t adding to its retained earnings, it isn’t growing its net worth.Rate of growth […]

Warren Buffett
warren buffett

Warren Buffett

Warren buffett points out the absurdity of beta by observing that “a stock that has dropped very sharply compared to the market … becomes ‘riskier’ at the lower price than it was at the higher price”-that is how beta measures risk. ordinary investors can make those distinctions by thinking about consumer behavior and the way […]

On the fine line between investment and speculation:
warren buffett

Warren Buffett ( On the fine line between investment and speculation)

On the fine line between investment and speculation: “The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. On the fine line between investment and speculation Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, […]

valueandprices
warren buffett

Acceptable Use of Adjusted Financial Metrics by (Warren Buffett)

When companies report earnings, they have the option to report ‘adjusted earnings-per-share’, which generally backs out one-time expenses such as: Restructuring charges Severance packages One-time tax liabilities And other metrics that are perceived to impede comparability to previous fiscal years. Including adjusted earnings in shareholder reports is completely optional.  However, the proportion of companies who […]