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January 2016 Data Update 5: Making a case for corporate governance
In my last post, I looked at the cost of capital, a measure of what it costs firms to raise capital. That capital, if put to good use by businesses, should earn returns higher than the costs to...
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January 2016 Data Update 6: Debt, the double edged sword!
In corporate finance, the decision on whether to borrow money, and if so, how much has divided both practitioners and theorists for as long as the question has been debated. Corporate finance, as a...
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January 2016 Data Update 7: Dividends, Potential Dividends and Cash Balances
In the last six posts, I have tried to look at the global corporate landscape, starting with how the market is pricing risk in the US and globally, how much investors are getting as risk free returns...
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Corporate Finance 101: A Big Picture, Applied Class!
In my last seven posts, I played my version of Moneyball with company data from the end of 2015, looking at how companies invest their shareholders' money, how much they borrow and the determinants of...
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January 2016 Data Update 8: Pricing, with an end of month update
If you have been tracking the posts that I have about my data updates, you probably noticed that early on, I had planned eight posts but that this shrunk to seven by the time I was done. The reason was...
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A Violent Earnings Season: Pricing and Value Perspectives
The earnings season is upon us once again, the quarterly rite of passage where companies report their earnings results, the numbers get measured up against expectations, expectations get reset and...
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Race to the top: The Duel between Alphabet and Apple!
Apple and Alphabet, the two companies jockeying for the prize of âlargest market cap company in the worldâ are both incredibly successful businesses, with unparalleled cash machines (the iPhone...
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The Disruptive Duo: Amazon and Netflix!
Amazon and Netflix! Need I say more? Just the mention of those companies cleaves market participants into opposing camps. In one camp are those who believe that those who invest in these companies are...
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Management Matters: Facebook and Twitter!
I am not a big user on social media. I have a Facebook page, which I donât visit often, never respond to pokes and donât post on at all. I tweet, but my 820 lifetime tweets pale in comparison to...
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Lazarus Rising or Icarus Falling? The GoPro and LinkedIn Question!
As I watch GoPro and LinkedIn, two high flying stocks of not that long ago, come back to earth my mind is drawn to two much-told stories. The first is the Greek myth about Icarus, a man who had wings...
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Negative Interest Rates: Impossible, Unnatural or Just Unusual?
In the years since the 2008 crisis, there is no question in finance that has caused more angst among investors, analysts and even onlookers than what to do about "abnormally low" interest rates. In...
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Valeant: Information Vacuums, Management Credibility and Investment Value
As an investor, would you buy shares in a company that is at the center of a political and legal firestorm? What if this company has a CEO who has lost the faith of his board and an ex-CFO who is being...
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DCF Myth 3: You cannot do a valuation, when there is too much uncertainty!
Uncertainty, both imminent and resolved, has been on my mind these last two weeks. I posted my valuation of Valeant on April 20, making the argument that, at least based on my expectations on what...
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DCF Myth 3.1: The Margin of Safety - Tool for Action or Excuse for Inaction?
In my last post on dealing with uncertainty, I brought up the margin of safety, the tool that many value investors claim to use to protect themselves against uncertainty. While there are certainly some...
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DCF Myth 3.2: If you don't look, its not there!
In this, the last of my three posts on uncertainty, I complete the cycle I started with a look at the responses (healthy and unhealthy) to uncertainty and followed up with an examination of the Margin...
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Icahn exits, Buffett enters, Whither Apple? Value and Price Effects of Big...
In my last post, I looked at Apple, arguing, with a Monte Carlo simulation, that the stock was a good investment at the prevailing market price ($93 at the time of the analysis). I appreciate the many...
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The Brexit Effect: The Signals amidst the Noise
There are few events that catch markets by complete surprise but the decision by British voters to leave the EU comes close. As markets struggle to adjust to the aftermath, analysts and experts are...
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Tesla: It's a story stock, but what's the story?
The last few weeks have tested Teslaâs shareholders and frustrated short sellers in the stock. Shareholders have had to weather a series of bad news stories, ranging from a failure to meet its...
View ArticleMay you live in "exciting" times! An Updated Picture of Country Risk
About a year ago, I completed my first update of a paper looking at all aspects of country risk, from political risk to default risk to equity risk, and wrote about my findings in three posts, one on...
View ArticleMay you live in "exciting" times! An Updated Picture of Country Risk
About a year ago, I completed my first update of a paper looking at all aspects of country risk, from political risk to default risk to equity risk, and wrote about my findings in three posts, one on...
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