Current Stock Quotes

Normally, when you challenge the conventional wisdom—that the current economic and political system is the only possible one—the first reaction you are likely to get is a demand for a detailed architectural blueprint of how an alternative system would work, down to the nature of its financial instruments, energy supplies, and policies of sewer maintenance. Next, you are likely to be asked for a detailed program of how this system will be brought into existence. Historically, this is ridiculous. When has social change ever happened according to someone’s blueprint? It’s not as if a small circle of visionaries in Renaissance Florence conceived of something they called “capitalism,” figured out the details of how the stock exchange and factories would someday work, and then put in place a program to bring their visions into reality. In fact, the idea is so absurd we might well ask ourselves how it ever occurred to us to imagine this is how change happens to begin.

The true investor scarcely ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more.* Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons’ mistakes of judgment.†

It’s as if the future is coming to us faster than we are heading to it. I think it was the author William Gibson who suggested that global stocks of cognitive dissonance are currently so high they threaten to make the traditional idea of science fiction redundant. And once you reach my age, you tend to find that the individual days become really long, but the years get shorter, which only distorts your temporal perspective still further.

The realms of dating, marriage, and sex are all marketplaces, and we are the products. Some may bristle at the idea of people as products on a marketplace, but this is an incredibly prevalent dynamic. Consider the labor marketplace, where people are also the product. Just as in the labor marketplace, one party makes an offer to another, and based on the terms of this offer, the other person can choose to accept it or walk. What makes the dating market so interesting is that the products we are marketing, selling, buying, and exchanging are essentially our identities and lives. As with all marketplaces, every item in stock has a value, and that value is determined by its desirability. However, the desirability of a product isn’t a fixed thing—the desirability of umbrellas increases in areas where it is currently raining while the desirability of a specific drug may increase to a specific individual if it can cure an illness their child has, even if its wider desirability on the market has not changed. In the world of dating, the two types of desirability we care about most are: - Aggregate Desirability: What the average demand within an open marketplace would be for a relationship with a particular person. - Individual Desirability: What the desirability of a relationship with an individual is from the perspective of a specific other individual. Imagine you are at a fish market and deciding whether or not to buy a specific fish: - Aggregate desirability = The fish’s market price that day - Individual desirability = What you are willing to pay for the fish Aggregate desirability is something our society enthusiastically emphasizes, with concepts like “leagues.” Whether these are revealed through crude statements like, “that guy's an 8,” or more politically correct comments such as, “I believe she may be out of your league,” there is a tacit acknowledgment by society that every individual has an aggregate value on the public dating market, and that value can be judged at a glance. When what we have to trade on the dating market is often ourselves, that means that on average, we are going to end up in relationships with people with an aggregate value roughly equal to our own (i.e., individuals “within our league”). Statistically speaking, leagues are a real phenomenon that affects dating patterns. Using data from dating websites, the University of Michigan found that when you sort online daters by desirability, they seem to know “their place.” People on online dating sites almost never send a message to someone less desirable than them, and on average they reach out to prospects only 25% more desirable than themselves. The great thing about these markets is how often the average desirability of a person to others is wildly different than their desirability to you. This gives you the opportunity to play arbitrage with traits that other people don’t like, but you either like or don’t mind. For example, while society may prefer women who are not overweight, a specific individual within the marketplace may prefer obese women, or even more interestingly may have no preference. If a guy doesn’t care whether his partner is slim or obese, then he should specifically target obese women, as obesity lowers desirability on the open marketplace, but not from his perspective, giving him access to women who are of higher value to him than those he could secure within an open market.

Two of the things to look out for are that operational cash flows should match or be close to profit levels, and current assets should exceed current liabilities.

But the super-awesome guy store was currently out of stock, and I heard the waiting list was endless.

if a fundamental analysis of a company reveals that it is currently overvalued, its stock price will likely gradually decrease

NO DIVINE BOVINE ! The clumsy creature currently inhabiting the White House is a distinctly dangerous animal. Part boneheaded raging bully, part dastardly coward showing signs of advanced stage mad cow disease. Neither of good pedigree nor useful breeding stock, there is essentially very little of substance between the T (bone) and the RUMP, except of course for an abundance of methane and bullshit. It's high time brave matadors for you to enter the bullring, with nimble step and fleet of foot. Take good aim and bring down this marauding beast once and for all. Slay public enemy number one and we will salute you forever. A louder cheer you will not hear from Madrid to Mexico City, from Beijing to Brussels, from London to Lahore, from Toronto to Tehran and ten thousand cities in between.

food and water can be thought of as a flow—or, more precisely, a critical-zone flow, a current with a volume that must be maintained. By contrast, fossil fuels are like a stock, a fixed amount of a good. Few dispute that the flow of food and water could be interrupted, with terrible effects. But people have disagreed for a century and a half—since the days of Pithole—about whether the world has an adequate stock of fossil fuels.

The only people to whose opinions I listen now with any respect are people much younger than myself. They seem in front of me. Life has revealed to them her latest wonder. As for the aged, I always contradict the aged. I do it on principle. If you ask them their opinion on something that happened yesterday, they solemnly give you the opinions current in 1820, when people wore high stocks, believed in everything, and knew absolutely nothing.

The witch obviously wanted my help with something, and I could only assume that she wanted a new body to inhabit. But I didn’t have any of those currently in stock, and bodies were one of the few things you couldn’t buy (yet) on Amazon.

Conversely, as such a stock rises to, say, 50 or 60 or 70, the urge to sell and take a profit now that the stock is “high” becomes irresistible to many people. Giving in to this urge can be very costly. This is because the genuinely worthwhile profits in stock investing have come from holding the surprisingly large number of stocks that have gone up many times from their original cost. The only true test of whether a stock is “cheap” or “high” is not its current price in relation to some former price, no matter how accustomed we may have become to that former price, but whether the company’s fundamentals are significantly more or less favorable than the current financial-community appraisal of that stock.

Youth! There is nothing like it. It’s absurd to talk of the ignorance of youth. The only people whose opinions I listen to now with any respect are people much younger than myself. They seem in front of me. Life has revealed to them her last wonder. As for the aged, I always contradict the aged. I do it on principle. If you ask them their opinion on something that happened yesterday, they solemnly give you the opinions current in 1820, when people wore high stocks and knew absolutely nothing.

The true investor scarcely ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more.* Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons’ mistakes of judgment.

screening option was created specifically for this book, magicformulainvesting.com. The magicformula investing.com site is designed to emulate the returns achieved in our study as closely as possible. This site is currently available for free. Step-by-step instructions for selecting stocks using magicformulainvesting.com follow. Other options include, but are not limited to, the screening packages available at aaii.com, powerinvestor.com, and smart money.com.

Youth! There is nothing like it. It's absurd to talk of the ignorance of youth. The only people whose opinions I listen now with any respect are people much younger than myself. They seem in front of me. Life has revealed to them her latest wonder. As for the aged, I always contradict the aged. I do it on principle. If you ask them their opinion on something that happened yesterday, they solemnly give you the opinions current in 1820, when people wore high stocks, believed in everything, and knew absolutely nothing.

These “everybody wins” arguments ring false because they are. If ameliorating poverty and racial division would get rich kids into better colleges or bump up a company’s stock price, wouldn’t well-off Americans already be doing it? It cannot both be true that excluding poor people from high-opportunity communities enriches the lives of the people inside the wall while degrading the lives of people outside of it and that tearing down the wall and welcoming the poor into those communities will come at no cost to the current residents.

The current ten largest currencies in the foreign exchange markets are listed in Table 4, along with their annual broad money supply increase for the periods between 1960–2015 and 1990–2015.16 The average for the ten most internationally liquid currencies is 11.13% for the period 1960–2015, and only 7.79% for the period between 1990 and 2015. This shows that the currencies that are most accepted worldwide, and have the highest salability globally, have a higher stock-to-flow ratio than the other currencies, as this book's analysis would predict.

WHAT DOES IT ALL MEAN? The lessons of market history are clear. Styles and fashions in investors’ evaluations of securities can and often do play a critical role in the pricing of securities. The stock market at times conforms well to the castle-in-the-air theory. For this reason, the game of investing can be extremely dangerous. Another lesson that cries out for attention is that investors should be very wary of purchasing today’s hot “new issue.” Most initial public offerings underperform the stock market as a whole. And if you buy the new issue after it begins trading, usually at a higher price, you are even more certain to lose. Investors would be well advised to treat new issues with a healthy dose of skepticism. Certainly investors in the past have built many castles in the air with IPOs. Remember that the major sellers of the stock of IPOs are the managers of the companies themselves. They try to time their sales to coincide with a peak in the prosperity of their companies or with the height of investor enthusiasm for some current fad. In such cases, the urge to get on the bandwagon—even in high-growth industries—produced a profitless prosperity for investors.

To get back my youth I would do anything in the world, except take exercise, get up early, or be respectable. Youth! There is nothing like it. It's absurd to talk of the ignorance of youth. The only people to whose opinions I listen now with any respect are people much younger than myself. They seem in front of me. Life has revealed to them her latest wonder. As for the aged, I always contradict the aged. I do it on principle. If you ask them their opinion on something that happened yesterday, they solemnly give you the opinions current in 1820, when people wore high stocks, believed in everything, and knew absolutely nothing.

There are 2 billion people who have no bank accounts at all. There are another 4 billion people who have very limited access to banking. ​ Banking without international currencies, banking without international markets, banking without liquidity. Bitcoin isn’t about the 1 billion. Bitcoin is all about the other 6 1/2. The people who are currently cut off from international banking. What do you think happens when you suddenly are able to turn a simple text-messaging phone in the middle of a rural area in Nigeria, connected to a solar panel, into a bank terminal? Into a Western Union remittance terminal? ​Into an international loan-origination system? A stock market? An IPO engine? At first, nothing, but give it a few years.

McDougall was a certified revolutionary hero, while the Scottish-born cashier, the punctilious and corpulent William Seton, was a Loyalist who had spent the war in the city. In a striking show of bipartisan unity, the most vociferous Sons of Liberty—Marinus Willett, Isaac Sears, and John Lamb—appended their names to the bank’s petition for a state charter. As a triple power at the new bank—a director, the author of its constitution, and its attorney—Hamilton straddled a critical nexus of economic power. One of Hamilton’s motivations in backing the bank was to introduce order into the manic universe of American currency. By the end of the Revolution, it took $167 in continental dollars to buy one dollar’s worth of gold and silver. This worthless currency had been superseded by new paper currency, but the states also issued bills, and large batches of New Jersey and Pennsylvania paper swamped Manhattan. Shopkeepers had to be veritable mathematical wizards to figure out the fluctuating values of the varied bills and coins in circulation. Congress adopted the dollar as the official monetary unit in 1785, but for many years New York shopkeepers still quoted prices in pounds, shillings, and pence. The city was awash with strange foreign coins bearing exotic names: Spanish doubloons, British and French guineas, Prussian carolines, Portuguese moidores. To make matters worse, exchange rates differed from state to state. Hamilton hoped that the Bank of New York would counter all this chaos by issuing its own notes and also listing the current exchange rates for the miscellaneous currencies. Many Americans still regarded banking as a black, unfathomable art, and it was anathema to upstate populists. The Bank of New York was denounced by some as the cat’s-paw of British capitalists. Hamilton’s petition to the state legislature for a bank charter was denied for seven years, as Governor George Clinton succumbed to the prejudices of his agricultural constituents who thought the bank would give preferential treatment to merchants and shut out farmers. Clinton distrusted corporations as shady plots against the populace, foreshadowing the Jeffersonian revulsion against Hamilton’s economic programs. The upshot was that in June 1784 the Bank of New York opened as a private bank without a charter. It occupied the Walton mansion on St. George’s Square (now Pearl Street), a three-story building of yellow brick and brown trim, and three years later it relocated to Hanover Square. It was to house the personal bank accounts of both Alexander Hamilton and John Jay and prove one of Hamilton’s most durable monuments, becoming the oldest stock traded on the New York Stock Exchange.

Inefficiency. A centralized financial system has many inefficiencies. Perhaps the most egregious example is the credit card interchange rate that causes consumers and small businesses to lose up to 3 percent of a transaction's value with every swipe due to the payment network oligopoly's pricing power. Remittance fees are 5–7 percent. Time is also wasted in the two days it takes to “settle” a stock transaction (officially transfer ownership). In the Internet age, this seems utterly implausible. Other inefficiencies include costly (and slow) transfer of funds, direct and indirect brokerage fees, lack of security, and the inability to conduct microtransactions, many of which are not obvious to users. In the current banking system, deposit interest rates remain very low and loan rates high because banks need to cover their brick-and-mortar costs. The insurance industry provides another example.

The case for bitcoin as a cash item on a balance sheet is very compelling for anyone with a time horizon extending beyond four years. Whether or not fiat authorities like it, bitcoin is now in free-market competition with many other assets for the world’s cash balances. It is a competition bitcoin will win or lose in the market, not by the edicts of economists, politicians, or bureaucrats. If it continues to capture a growing share of the world’s cash balances, it continues to succeed. As it stands, bitcoin’s role as cash has a very large total addressable market. The world has around $90 trillion of broad fiat money supply, $90 trillion of sovereign bonds, $40 trillion of corporate bonds, and $10 trillion of gold. Bitcoin could replace all of these assets on balance sheets, which would be a total addressable market cap of $230 trillion. At the time of writing, bitcoin’s market capitalization is around $700 billion, or around 0.3% of its total addressable market. Bitcoin could also take a share of the market capitalization of other semihard assets which people have resorted to using as a form of saving for the future. These include stocks, which are valued at around $90 trillion; global real estate, valued at $280 trillion; and the art market, valued at several trillion dollars. Investors will continue to demand stocks, houses, and works of art, but the current valuations of these assets are likely highly inflated by the need of their holders to use them as stores of value on top of their value as capital or consumer goods. In other words, the flight from inflationary fiat has distorted the U.S. dollar valuations of these assets beyond any sane level. As more and more investors in search of a store of value discover bitcoin’s superior intertemporal salability, it will continue to acquire an increasing share of global cash balances.

According to the current view, the maintenance of sound monetary conditions is only possible with a 'credit balance of payments'. The confutation of this and related objections is implicit in the Quantity Theory and in Gresham's Law. The Quantity Theory shows that money can never permanently flow abroad from a country in which only metallic money is used (the 'purely metallic currency' of the Currency Principle). The tightness in the domestic market called forth by the efflux of part of the stock of money reduces the prices of commodities, and so restricts importation and encourages exportation, until there is once more enough money at home. The precious metals which perform the function of money are distributed among individuals, and consequently among separate countries, according to the extent and intensity of the demand of each for money. State intervention to assure to the community the necessary quantity of money by regulating its international nlovements is supererogatory.

Shareholders have a residual claim on a firm’s assets and earnings, meaning they get what’s left after all other claimants—employees and their pension funds, suppliers, tax-collecting governments, debt holders, and preferred shareholders (if any exist)—are paid. The value of their shares, therefore, is the discounted value of all future cash flows minus those payments. Since the future is unknowable, potential shareholders must estimate what that cash flow will be; their collective expectations about the future determine the stock price. Any shareholders who expect that the discounted value of future equity earnings of the company will be less than the current price will sell their stock. Any potential shareholders who expect that the discounted future value will exceed the current price will buy stock. This means that shareholder value has almost nothing to do with the present. Indeed, present earnings tend to be a small fraction of the value of common shares. Over the past decade, the average yearly price-earnings multiple for the S&P 500 has been 22x, meaning that current earnings represent less than 5 percent of stock prices.

suggest funding college, or at least the first step of college, with an Educational Savings Account (ESA), funded in a growth-stock mutual fund. The Educational Savings Account, nicknamed the Education IRA, grows tax-free when used for higher education. If you invest $2,000 a year from birth to age eighteen in prepaid tuition, that would purchase about $72,000 in tuition, but through an ESA in mutual funds averaging 12 percent, you would have $126,000 tax-free. The ESA currently allows you to invest $2,000 per year, per child, if your household income is under $220,000 per year. If you start investing early, your child can go to virtually any college if you save $166.67 per month ($2,000/year). For most of you, Baby Step Five is handled if you start an ESA fully funded and your child is under eight. If your children are older, or you have aspirations of expensive schools, graduate school, or PhD programs that you pay for, you will have to save more than the ESA will allow. I would still start with the ESA if the income limits don’t keep you out. Start with the ESA because you can invest it anywhere, in any fund or any mix of funds, and change it at will. It is the most flexible, and you have the most control.

Most whites in America have a consciousness of race that is very different from that of minorities. They do not attach much importance to the fact that they are white, and they view race as an illegitimate reason for decision-making of any kind. Many whites have made a genuine effort to transcend race and to see people as individuals. They often fail, but their professed goal is color-blindness. Some whites have gone well beyond color-blindness and see their race as uniquely guilty and without moral standing. Neither the goal of color-blindness nor a negative view of their own race has any parallel in the thinking of non-whites. Most whites also believe that racial equality, integration, and “diversity” flow naturally from the republican, anti-monarchical principles of the American Revolution. They may know that Thomas Jefferson owned slaves but they believe that the man who wrote “all men are created equal” had a vision of the egalitarian, heterogeneous society in which we now live. They are wrong. Earlier generations of white Americans had a strong racial consciousness. Current assumptions about race are a dramatic reversal of the views not only of the Founding Fathers but of the great majority of Americans up until the 1950s and 1960s. Change on this scale is rare in any society, and the past views of whites are worth investigating for the perspective they provide on current views. It is possible to summarize the racial views that prevailed in this country until a few decades ago as follows: White Americans believed race was a fundamental aspect of individual and group identity. They believed people of different races differed in temperament, ability, and the kind of societies they built. They wanted America to be peopled by Europeans, and thought only people of European stock could maintain the civilization they valued. They therefore considered immigration of non-whites a threat to whites and to their civilization. It was common to regard the presence of non-whites as a burden, and to argue that if they could not be removed from the country they should be separated from whites socially and politically. Whites were strongly opposed to miscegenation, which they called “amalgamation.” Many injustices were committed in defense of these views, and many of the things prominent Americans of the past said ring harshly on contemporary ears. And yet the sentiment behind them—a sense of racial solidarity—is not very different from the sentiments we find among many non-whites today.

It wasn’t until she had almost reached its lights that she heard another rider in the hills behind her. Ice slid down Kestrel’s spine. Fear, that the rider was Arin. Fear, at her sudden hope that it was. She pulled Javelin to a stop and swung to the ground. Better to go on foot through the narrow streets to the harbor. Stealth was more important now than speed. Beating hooves echoed in the hills. Closer. She hugged Javelin hard around the neck, then pushed him away while she still could bear to do it. She slapped his rump in an order to head home. Whether he’d go to her villa or Arin’s, she couldn’t say. But he left, and might draw the other rider after him if she was indeed being pursued. She slipped into the city shadows. And it was magic. It was as if the Herrani gods had turned on their own people. No one noticed Kestrel skulking along walls or heard her cracking the thin ice of a puddle. No late-night wanderer looked in her face and saw a Valorian. No one saw the general’s daughter. Kestrel made it to the harbor, down to the docks. Where Arin waited. His breath heaved white clouds into the air. His hair was black with sweat. It hadn’t mattered that Kestrel had been ahead of him on the horse path. Arin had been able to run openly through the city while she had crept through alleys. Their eyes met, and Kestrel felt utterly defenseless. But she had a weapon. He didn’t, not that she could see. Her hand instinctively fell to her knife’s jagged edge. Arin saw. Kestrel wasn’t sure what came first: his quick hurt, so plain and sharp, or her certainty--equally plain, equally sharp--that she could never draw a weapon on him. He straightened from his runner’s crouch. His expression changed. Until it did, Kestrel hadn’t perceived the desperate set of his mouth. She hadn’t recognized the wordless plea until it was gone, and his face aged with something sad. Resigned. Arin glanced away. When he looked back it was as if Kestrel were part of the pier beneath her feet. A sail stitched to a ship. A black current of water. As if she were not there at all. He turned away, walked into the illuminated house of the new Herrani harbormaster, and shut the door behind him. For a moment Kestrel couldn’t move. Then she ran for a fishing boat docked far enough from its fellows that she might cast off from shore unnoticed by an sailors on the other vessels. She leaped onto the deck and took rapid stock of the boat. The tiny cabin was bare of supplies. As she lifted the anchor and uncoiled the rope tethering the boat to its dock, she knew, even if she couldn’t see, that Arin was talking with the harbormaster, distracting him while Kestrel prepared to set sail.

MH: In an early letter to William Kennedy you spoke of the "dry rot" of American journalism. Tell me what you think. What's the state of the American press currently? HST: The press today is like the rest of the country. Maybe you need a war. Wars tend to bring out out the best in them. War was everywhere you looked in the sixties, extending into the seventies. Now there are no wars to fight. You know, it's the old argument about why doesn't the press report the good news? Well, now the press is reporting the good news, and it's not as much fun. The press has been taken in by Clinton. And by the amalgamation of politics. Nobody denies that the parties are more alike than they are different. No, the press has failed, failed utterly -- they've turned into slovenly rotters. Particularly The New York Times, which has come to be a bastion of political correctness. I think my place in history as defined by the PC people would be pretty radically wrong. Maybe I could be set up as a target at the other end of the spectrum. I feel more out of place now than I did under Nixon. Yeah, that's weird. There's something going on here, Mr. Jones, and you don't know what it is, do you? Yeah, Clinton has been a much more successfully deviant president than Nixon was. You can bet if the stock market fell to 4,000 and if four million people lost their jobs there'd be a lot of hell to pay, but so what? He's already re-elected. Democracy as a system has evolved into something that Thomas Jefferson didn't anticipate. Or maybe he did, at the end of his life. He got very bitter about the press. And what is it he said? "I tremble for my nation when I reflect that God is just"? That's a guy who's seen the darker side. Yeah, we've become a nation of swine. - HST - The Atlantic , August 26, 1997

History favors the bold. Compensation favors the meek. As a Fortune 500 company CEO, you’re better off taking the path often traveled and staying the course. Big companies may have more assets to innovate with, but they rarely take big risks or innovate at the cost of cannibalizing a current business. Neither would they chance alienating suppliers or investors. They play not to lose, and shareholders reward them for it—until those shareholders walk and buy Amazon stock. Most boards ask management: “How can we build the greatest advantage for the least amount of capital/investment?” Amazon reverses the question: “What can we do that gives us an advantage that’s hugely expensive, and that no one else can afford?” Why? Because Amazon has access to capital with lower return expectations than peers. Reducing shipping times from two days to one day? That will require billions. Amazon will have to build smart warehouses near cities, where real estate and labor are expensive. By any conventional measure, it would be a huge investment for a marginal return. But for Amazon, it’s all kinds of perfect. Why? Because Macy’s, Sears, and Walmart can’t afford to spend billions getting the delivery times of their relatively small online businesses down from two days to one. Consumers love it, and competitors stand flaccid on the sidelines. In 2015, Amazon spent $7 billion on shipping fees, a net shipping loss of $5 billion, and overall profits of $2.4 billion. Crazy, no? No. Amazon is going underwater with the world’s largest oxygen tank, forcing other retailers to follow it, match its prices, and deal with changed customer delivery expectations. The difference is other retailers have just the air in their lungs and are drowning. Amazon will surface and have the ocean of retail largely to itself.

For some reason newspapers are not the laboratories and experimental stations of the mind that they could be, to the public's great benefit, but usually only its warehouses and stock exchanges. If he were alive today, Plato—to take him as an example, because along with a dozen others he is regarded as the greatest thinker who ever lived—would certainly be ecstatic about a news industry capable of creating, exchanging, refining a new idea every day; where information keeps pouring in from the ends of the earth with a speediness he never knew in his own lifetime, while a staff of demiurges is on hand to check it all out instantaneously for its content of reason and reality. He would have supposed a newspaper office to be that topos uranios, that heavenly realm of ideas, which he has described so impressively that to this day all the better class of people are still idealists when talking to their children or employees. And of course if Plato were to walk suddenly into a news editor’s office today and prove himself to be indeed that great author who died over two thousand years ago he would be a tremendous sensation and would instantly be showered with the most lucrative offers. If he were then capable of writing a volume of philosophical travel pieces in three weeks, and a few thousand of his well-known short stories, perhaps even turn one or the other of his older works into film, he could undoubtedly do very well for himself for a considerable period of time. The moment his return had ceased to be news, however, and Mr. Plato tried to put into practice one of his well-known ideas, which had never quite come into their own, the editor in chief would ask him to submit only a nice little column on the subject now and then for the Life and Leisure section (but in the easiest and most lively style possible, not heavy: remember the readers), and the features editor would add that he was sorry, but he could use such a contribution only once a month or so, because there were so many other good writers to be considered. And both of these gentlemen would end up feeling that they had done quite a lot for a man who might indeed be the Nestor of European publicists but still was a bit outdated, and certainly not in a class for current newsworthiness with a man like, for instance, Paul Arnheim.

What could be the next steps in travel for Amazon? Very likely, acquisitions. Expedia stock value dropped from over 150$ to 110$ in one year and, with 1:14 stock ratio (Amazon stock reached an astonishing 1,400$), the acquisition would give Bezos the technology and know-how necessary to forcefully enter the travel landscape and compete with Google. trivago is another possible choice: last June the German metasearch engine was worth over 20$ a share, over 3 times the current value (6$). And what about TripAdvisor? It may have found a new youth with the new feed-based design, but it is still worth half of what it used to be 4 years ago. All those investments would be possible for Amazon, a company with a capitalization of over 1,000 billion dollars

When people have lost money in common stocks or mutual funds, they often face a dilemma. Should they stick with their losing investments, increase their stake (perhaps through dollar cost averaging), or move their holdings to an entirely different investment vehicle? Virtually the same dilemma confronts people who are dissatisfied with their current jobs, careers, or marriages. They must decide whether it is wise to continue in these situations or start anew with different firms, occupations, or partners.

Cass didn’t fight it when Falco leaned in and kissed her. She didn’t resist as he tipped her gently backward and laid her down on the wooden bottom of the batèla. Just be who you are. Easy to say, but so difficult to do. Falco unfolded a blanket over her. “So you don’t get cold,” he said. “What’s going to keep you warm?” Cass asked softly, reaching up to tousle his hair. Falco laughed. “Trust me, I’m plenty warm.” “Prove it,” Cass said, pulling him down to her level. She pressed her lips to his, surprised at her own bravery, emboldened by the way his body responded to hers. They fell back deeper into the boat, its creaky wooden sides offering privacy in the already-dark night. He kissed her harder, his tongue exploring her lips and mouth in soft circles. The small boat rocked underneath her, swaying with the gentle current of the canal. The weight of his chest pressed down on her rib cage, her hip bones pressed against his, even through the many layers of garments she wore. She felt a rush of warmth, a heat that made her forget everything else that had been bothering her. It was like she had slipped outside of her skin, and that only her soul, her essence, lay in the boat with Falco. As Falco traced her hairline with his lips, he reached behind her back and loosened the ties of her bodice. He stroked the bare skin of her upper back. Cass couldn’t believe how warm his hands felt. She let her own hands wander beneath the hem of his shirt. Her fingers traced his muscles--first the stomach and then the chest. His pounding heartbeat accelerated as they kissed. Her own blood raced through her veins, trying to keep up. Again Cass thought of the way the body was a single thing, yet was made up of so many different parts all working together. She could barely believe this was happening. She felt like a stranger, a wild, impulsive stranger. “Cassandra,” Falco murmured. He reached up and twisted all her hair into one of his hands, pulling it slightly as he held it behind her head. His lips made their way across her cheek and her jaw and her brow bone. His other hand caressed her left leg through her cotton stocking. His fingers followed the repeating diamond pattern embossed into her leather garter and then stroked the soft skin just above it. Cass felt transported by his touch, his soft voice, and the mist rising off the canals. Everything felt otherworldly. It was a dream or a hallucination. Any moment now she’d wake up tucked beneath her covers with Slipper snuggled against her chest. Just let go.

But note this important fact: The true investor scarcely ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more.* Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons’ mistakes of judgment.

In his endeavor to select the most promising stocks either for the near term or the longer future, the investor faces obstacles of two kinds—the first stemming from human fallibility and the second from the nature of his competition. He may be wrong in his estimate of the future; or even if he is right, the current market price may already fully reflect what he is anticipating.

By now, though, it had been a steep learning curve, he was fairly well versed on the basics of how clearing worked: When a customer bought shares in a stock on Robinhood — say, GameStop — at a specific price, the order was first sent to Robinhood's in-house clearing brokerage, who in turn bundled the trade to a market maker for execution. The trade was then brought to a clearinghouse, who oversaw the trade all the way to the settlement. During this time period, the trade itself needed to be 'insured' against anything that might go wrong, such as some sort of systemic collapse or a default by either party — although in reality, in regulated markets, this seemed extremely unlikely. While the customer's money was temporarily put aside, essentially in an untouchable safe, for the two days it took for the clearing agency to verify that both parties were able to provide what they had agreed upon — the brokerage house, Robinhood — had to insure the deal with a deposit; money of its own, separate from the money that the customer had provided, that could be used to guarantee the value of the trade. In financial parlance, this 'collateral' was known as VAR — or value at risk. For a single trade of a simple asset, it would have been relatively easy to know how much the brokerage would need to deposit to insure the situation; the risk of something going wrong would be small, and the total value would be simple to calculate. If GME was trading at $400 a share and a customer wanted ten shares, there was $4000 at risk, plus or minus some nominal amount due to minute vagaries in market fluctuations during the two-day period before settlement. In such a simple situation, Robinhood might be asked to put up $4000 and change — in addition to the $4000 of the customer's buy order, which remained locked in the safe. The deposit requirement calculation grew more complicated as layers were added onto the trading situation. A single trade had low inherent risk; multiplied to millions of trades, the risk profile began to change. The more volatile the stock — in price and/or volume — the riskier a buy or sell became. Of course, the NSCC did not make these calculations by hand; they used sophisticated algorithms to digest the numerous inputs coming in from the trade — type of equity, volume, current volatility, where it fit into a brokerage's portfolio as a whole — and spit out a 'recommendation' of what sort of deposit would protect the trade. And this process was entirely automated; the brokerage house would continually run its trading activity through the federal clearing system and would receive its updated deposit requirements as often as every fifteen minutes while the market was open. Premarket during a trading week, that number would come in at 5:11 a.m. East Coast time, usually right as Jim, in Orlando, was finishing his morning coffee. Robinhood would then have until 10:00 a.m. to satisfy the deposit requirement for the upcoming day of trading — or risk being in default, which could lead to an immediate shutdown of all operations. Usually, the deposit requirement was tied closely to the actual dollars being 'spent' on the trades; a near equal number of buys and sells in a brokerage house's trading profile lowered its overall risk, and though volatility was common, especially in the past half-decade, even a two-day settlement period came with an acceptable level of confidence that nobody would fail to deliver on their trades.

2. Planning is important, but the most important part of every plan is to plan on the plan not going according to plan. What’s the saying? You plan, God laughs. Financial and investment planning are critical, because they let you know whether your current actions are within the realm of reasonable. But few plans of any kind survive their first encounter with the real world. If you’re projecting your income, savings rate, and market returns over the next 20 years, think about all the big stuff that’s happened in the last 20 years that no one could have foreseen: September 11th, a housing boom and bust that caused nearly 10 million Americans to lose their homes, a financial crisis that caused almost nine million to lose their jobs, a record-breaking stock-market rally that ensued, and a coronavirus that shakes the world as I write this. A plan is only useful if it can survive reality. And a future filled with unknowns is everyone’s reality. A good plan doesn’t pretend this weren’t true; it embraces it and emphasizes room for error. The more you need specific elements of a plan to be true, the more fragile your financial life becomes. If there’s enough room for error in your savings rate that you can say, “It’d be great if the market returns 8% a year over the next 30 years, but if it only does 4% a year I’ll still be OK,” the more valuable your plan becomes. Many bets fail not because they were wrong, but because they were mostly right in a situation that required things to be exactly right. Room for error—often called margin of safety—is one of the most underappreciated forces in finance. It comes in many forms: A frugal budget, flexible thinking, and a loose timeline—anything that lets you live happily with a range of outcomes. It’s different from being conservative. Conservative is avoiding a certain level of risk. Margin of safety is raising the odds of success at a given level of risk by increasing your chances of survival. Its magic is that the higher your margin of safety, the smaller your edge needs to be to have a favorable outcome.

Many financial analysts will find Emerson and Emery more interesting and appealing stocks than the other two—primarily, perhaps, because of their better “market action,” and secondarily because of their faster recent growth in earnings. Under our principles of conservative investment the first is not a valid reason for selection—that is something for the speculators to play around with. The second has validity, but within limits. Can the past growth and the presumably good prospects of Emery Air Freight justify a price more than 60 times its recent earnings?1 Our answer would be: Maybe for someone who has made an in-depth study of the possibilities of this company and come up with exceptionally firm and optimistic conclusions. But not for the careful investor who wants to be reasonably sure in advance that he is not committing the typical Wall Street error of overenthusiasm for good performance in earnings and in the stock market.* The same cautionary statements seem called for in the case of Emerson Electric, with a special reference to the market’s current valuation of over a billion dollars for the intangible, or earning-power, factor here. We should add that the “electronics industry,” once a fair-haired child of the stock market, has in general fallen on disastrous days. Emerson is an outstanding exception, but it will have to continue to be such an exception for a great many years in the future before the 1970 closing price will have been fully justified by its subsequent performance. By contrast, both ELTRA at 27 and Emhart at 33 have the earmarks of companies with sufficient value behind their price to constitute reasonably protected investments. Here the investor can, if he wishes, consider himself basically a part owner of these businesses, at a cost corresponding to what the

The classic view of the correct price of a common stock is that it is derived from the value of all the future earnings. These earnings are uncertain and subject to unknowable factors. Could anyone have known beforehand how to allow for the impact of 9/11 on the future earnings, hence on the then current market price, of firms headquartered in the Twin Towers of the World Trade Center? These future payoffs are discounted to a present value reflecting their various probabilities and risks.

In its simplest form, investors sell losing stocks before the end of the current year, realizing losses that reduce the year’s income taxes. This behavior contributes to the so-called January effect where selling pressure in December further depresses the stock prices of the year’s losers, followed by a rebound and excessive performance in January.

pan-gender’, understood as people who identify ‘with a multitude, and perhaps infinite (going beyond the current knowledge of genders) number of genders either simultaneously, to varying degrees, or over the course of time’.

The dividend discount model suggests that in an efficient market, the current price of a stock should equal the present value of all expected future dividends, assuming for the sake of simplicity that the investor has no intention of selling the stock. (The present value is sometimes called the discounted value, since the present value of an item is discounted from its value in the future.)

Carefully avoided in many scientific discussions, conferences, government reports, and papers is the issue of human population. Indeed, in many conferences it is deemed to be a subject that is out of bounds. Rising numbers of people, and their desire for higher standards of living, put increasing demands on natural resources. More people are chasing a fixed or declining stock of reef resources: the area of the planet on which coral reefs can grow is limited, after all. In one sense it is really that simple. Some places have a human population doubling time of only 15 years, which reflects medical advances and its highly desirable accompaniments such as increased survival of people, especially infants. However, this means that current scientifically calculated solutions for a particular section of reef shoreline, for example, are negated when the population doubles. Thus the solution is no longer a scientific one, but has become largely a social and political one, and one of planning or zoning reefs and other resources as noted above. Human numbers are a part of the equation, and if we ignore any part of an equation then we cannot solve it.

Ed Seykota: "Fundamentals that you read about are typically useless as the market has already discounted the price, and I call them 'funny-mentals.' I am primarily a trend trader with touches of hunches based on about twenty years of experience. In order of importance to me are: (1) the long-term trend, (2) the current chart pattern, and (3) picking a good spot to buy or sell. Those are the three primary components of my trading. Way down in very distant fourth place are my fundamental ideas and, quite likely, on balance, they have cost me money.

A report in the peer-reviewed journal Public Health Nutrition showed that the organisation accepted more than $4 million from food companies and industry associations, including Coca-Cola, PepsiCo, Nestlé, Hershey, Kellogg’s and Conagra.39 And this was just between 2011 and 2017. In addition, they had significant equity in UPF companies including more than a million dollars of stocks in PepsiCo, Nestlé and J.M. Smucker.40 Meanwhile, back across the Atlantic, Diabetes UK lists Boots, Tesco and Abbott as corporate partners.41 Cancer Research UK is funded by Compass, Roadchef, Slimming World, Tesco and Warburtons.42 The British Heart Foundation takes money from Tesco.43 The British Dietetic Association has Abbott, Danone and Quorn as its current strategic partners, with other food companies as supporters.44 The

I have always detested the ghastly pasttimes upon which girls are encouraged to squander their lives. Spending hours squinting over an embroidery ring does not strike me as a worthwhile use of anyone's time. For the lower classes, sewing or knitting may be a necessity, but we are not paupers and there is no need for me to go about in homemade togs. Of course, there is the piano, but since Veronica's death it has been no more than an ornament. ... So I spent my evenings in the brocade armchair reading novels about Modern Independent Women who throw it all up at the first whiff of matrimony. I long ago resolved never to become a Modern Independent Woman. I do not myself understand this current mania for freedom. It seems to me that we would all be a good deal better off if we accepted our lot in life, rather than struggling to throw off some imagined shackles. I realise that not everyone is as fortunate as me, but this constant striving for things above one's station is no more than a recipe for discontent. I want nothing more than to look after my father and be able to treat myself now and then to a new coat or a pair of stockings. That is not to say that when I am out and about, I do not sometimes feel a stab of envy towards those to whom success comes easily, but we cannot all be tip-toppers. It is better all round to accept one's allotted portion in life. All the needlepoint and pianoforte in the world cannot alter the fact that, for most of us, quiet despair is the best we can hope for.

Buybacks: How the Game Works Imagine a company – let’s call it FinEng Corp – with sales of $1 billion and a 5 per cent profit margin. The $50 million of profits are taxed at a 30 per cent rate. The company has 500 million shares outstanding and shareholders’ equity of $500 million. The shares trade at 15 times earnings. The corporate incentive plan provides senior executives with 50 million stock options, which strike at the current market price. At this point, FinEng has no

The fact is that one person’s growth stock is another’s value stock. Recently, the investment data company Lipper has reported that Citigroup, AIG and IBM are among the top 15 mutual fund holdings in both the large company “value” and “growth” categories. This brings us to our next point, which perhaps best explains why Marathon should never be labelled as a pure value investor. Our capital cycle process examines the effects of the creative and destructive forces of capitalism over time. A growth stock usually becomes a value stock after excess capital, lured in by large current profitability, brings about a decline in returns. When this becomes extreme, as was the case during the technology bubble, the resultant bust can turn growth stocks into value stocks almost overnight. The telecoms sector provides

People are stealing nuts and bolts out of rail plates, Miss Taggart, stealing them at night, and our stock is running out, the division storehouse is bare, what are we to do, Miss Taggart?” But a super-color-four-foot-screen television set was being erected for tourists in a People’s Park in Washington—and a super-cyclotron for the study of cosmic rays was being erected at the State Science Institute, to be completed in ten years. “The trouble with our modern world,” Dr. Robert Stadler said over the radio, at the ceremonies launching the construction of the cyclotron, “is that too many people think too much. It is the cause of all our current fears and doubts. An enlightened citizenry should abandon the superstitious worship of logic and the outmoded reliance on reason. Just as laymen leave medicine to doctors and electronics to engineers, so people who are not qualified to think should leave all thinking to the experts and have faith in the experts’ higher authority. Only experts are able to understand the discoveries of modern science, which have proved that thought is an illusion and that the mind is a myth.” “This age of misery is God’s punishment to man for the sin of relying on his mind!” snarled the triumphant voices of mystics of every sect and sort, on street corners, in rain-soaked tents, in crumbling temples. “This world ordeal is the result of man’s attempt to live by reason! This is where thinking, logic and science have brought you! And there’s to be no salvation until men realize that their mortal mind is impotent to solve their problems and go back to faith, faith in God, faith in a higher authority!

Pricing power Ultimately, what drives stock returns over time is earnings. Not past earnings, but current and future earnings. Those earnings, in the simplest terms, are how much money a company actually makes by doing business. It is what’s left over for a company to keep after a product or service is sold and the expenses are paid. It’s the profit that gets put in the bank.

There are hints, too, of wider social trends. The first edition of the Dictionary contains more than thirty references to coffee, and even more to tea. Johnson would vigorously defend the latter, not long after the Dictionary was published, in his review of an essay by the umbrella-toting Hanway, who believed it was ‘pernicious to health, obstructing industry and impoverishing the nation’.2 Johnson’s love of tea was deep but not exceptional: the leaf had been available in England since the 1650s (Pepys records drinking it for the first time in September 1660), and by 1755 it was being imported to Britain at the rate of 2,000 tons a year. The fashion for tea-drinking, facilitated by Britain’s imperial resources, drove demand for another fruit of the colonies, sugar (‘the native salt of the sugar-cane, obtained by the expression and evaporation of its juice’). Tea also played a crucial role in the dissolution of the eighteenth-century British Empire, for it was of course Bostonian opponents of a British tax on tea who opened the final breach between Britain and colonial America. All the same, it was coffee that proved the more remarkable phenomenon of the age. Johnson gives a clue to this when he defines ‘coffeehouse’ as ‘a house of entertainment where coffee is sold, and the guests are supplied with newspapers’. It was this relationship between coffee and entertainment (by which Johnson meant ‘conversation’) that made it such a potent force. Coffee was first imported to Europe from Yemen in the early part of the seventeenth century, and the first coffee house opened in St Mark’s Square in Venice in 1647. The first in England opened five years later—a fact to which Johnson refers in his entry for ‘coffee’—but its proprietor, Daniel Edwards, could hardly have envisioned that by the middle of the following century there would be several thousand coffee houses in London alone, along with new coffee plantations, run by Europeans, in the East Indies and the Caribbean. Then as now, coffee houses were meeting places, where customers (predominantly male) could convene to discuss politics and current affairs. By the time of the Dictionary they were not so much gentlemanly snuggeries as commercial exchanges. As the cultural historian John Brewer explains, ‘The coffee house was the precursor of the modern office’; in later years Johnson would sign the contract for his Lives of the English Poets in a coffee house on Paternoster Row, and the London Stock Exchange and Lloyd’s have their origins in the coffee-house culture of the period. ‘Besides being meeting places’, the coffee houses were ‘postes restantes, libraries, places of exhibition and sometimes even theatres’. They were centres, too, of political opposition and, because they were open to all ranks and religions, they allowed a rare freedom of information and expression.

Buffett’s 1952 memo on Cleveland Worsted Mills mentioned that the stock traded below net current asset value and had “several well-equipped mills.”98 He thought the company had ample earnings to cover the dividend, a view supported by the summary financials found in Table 1. The company paid $8.00 a share out to shareholders, and the last year the company earned below this figure was 1945.99 The income and return on capital figures were a little concerning. Like Marshall-Wells in the first chapter, Cleveland Worsted Mills was coming off the post-World War II highs and falling back to earth, earning a respectable but not extraordinary return on invested capital in 1951. Worsted was a commodity product, with shortages the sole reason for the company’s previously rising income and returns on capital. As the market normalized, the company was unlikely to earn above-average returns on capital in the future.

Buffett’s thesis on Cleveland Worsted Mills was straightforward. The stock sold for below its net current asset value and at a bargain P/E multiple. The worsted manufacturer was consistently profitable and paid a fat dividend. By 1952, having graduated from Columbia and now an employee at Buffett-Falk, Buffett liked the stock enough to write a brief report on it, stating, “The $8 dividend provides a well-protected 7% yield on the current price of approximately $115.”86 The stock had been cheap for some time. Buffett, in fact, had held the stock in 1951, selling at a slight loss as he invested his capital in companies like GEICO and Timely Clothes. Ben Graham also liked the stock, having made the Cleveland firm a 1.5% position in the Graham-Newman fund and including the company in the 1951 edition of Security Analysis in a table titled “Six Common Stocks Undervalued in 1949,” along with Marshall-Wells.87

The balance sheet told a different story. Selling for $13.38 per share at the end of 1954—an $18.8 million market capitalization—P&R traded close to its net current asset value of $9.16 per share, a figure that included significant excess inventory. While this alone was not enough to make the stock cheap, P&R also had an off-balance-sheet asset known as culm banks, a waste material accumulated from anthracite mining which was thought to have value as a fuel source. Buffett believed this asset could be worth around $8 per share.150 The net current asset value and the culm banks combined were worth $17 a share, enough to give Buffett confidence that the stock was cheap. But, as Table 2 shows, the company also had substantial property, plant, and equipment. These fixed assets were almost certainly worth less than their carrying value, as the industry had deteriorated since the company last valued them when it emerged from bankruptcy in 1945. While it wasn’t clear what they were worth, they were certainly worth something. Finally, and ultimately most importantly, Ben Graham was on P&R’s board of directors, becoming a member after purchasing the stock in 1952. Buffett, who had discovered the stock on his own, would join Graham’s firm in 1954. While Graham had not taken any significant action as a board member by then, Buffett sensed that his professor, mentor, and now boss would eventually make something happen. As he later stated, “I was just a peon sitting in the outer office… I was not in the inner circle, but I was terribly interested, knowing something was going on.

Morgan retaliated with a strategy that would become one of his hallmarks. He spread rumors to Wall Street that Westinghouse’s company was financially unstable, which dissuaded investors from giving Westinghouse the capital that he needed to expand the production and installation of his alternating current generators. Morgan then began an attack through stock manipulation, and moved to gain control of The Westinghouse Corporation, and thus Tesla’s patents. By the end of 1897, Westinghouse was nearly bankrupt, and it looked as though Morgan would usurp everything that Tesla and Westinghouse had built together. Westinghouse owed Tesla over $1 million in royalties, an amount that grew daily. When Westinghouse described to Tesla the desperate situation, Tesla replied with the following: “Mr. Westinghouse, you have been my friend, you believed in me when others had no faith; you were brave enough to go ahead when others lacked courage; you supported me when even your own engineers lacked vision. ... Here is your contract, and here is my contract. I will tear them both to pieces, and you will no longer have any troubles from my royalties.” In time, these royalties would’ve made Tesla the world’s first billionaire. Instead, they enabled Westinghouse to save his company. Tesla’s selflessness was a testament not only to his generosity and goodwill, but his belief in his ability to continue to create his future.

In response to current events, people often reach for historical analogies, and this occasion was no exception. The trick is to choose the right analogy. In August 2007, the analogies that came to mind—both inside and outside the Fed—were October 1987, when the Dow Jones industrial average had plummeted nearly 23 percent in a single day, and August 1998, when the Dow had fallen 11.5 percent over three days after Russia defaulted on its foreign debts. With help from the Fed, markets had rebounded each time with little evident damage to the economy. Not everyone viewed these interventions as successful, though. In fact, some viewed the Fed’s actions in the fall of 1998—three quarter-point reductions in the federal funds rate—as an overreaction that helped fuel the growing dot-com bubble. Others derided what they perceived to be a tendency of the Fed to respond too strongly to price declines in stocks and other financial assets, which they dubbed the “Greenspan put.” (A put is an options contract that protects the buyer against loss if the price of a stock or other security declines.) Newspaper opinion columns in August 2007 were rife with speculation that Helicopter Ben would provide a similar put soon. In arguing against Fed intervention, many commentators asserted that investors had grown complacent and needed to be taught a lesson. The cure to the current mess, this line of thinking went, was a repricing of risk, meaning a painful reduction in asset prices—from stocks to bonds to mortgage-linked securities. “Credit panics are never pretty, but their virtue is that they restore some fear and humility to the marketplace,” the Wall Street Journal had editorialized, in arguing for no rate cut at the August 7 FOMC meeting.

You can see Musk’s embrace of the car as lifestyle in Tesla’s abandonment of model years. Tesla does not designate cars as being 2014s or 2015s, and it also doesn’t have “all the 2014s in stock must go, go, go and make room for the new cars” sales. It produces the best Model S it can at the time, and that’s what the customer receives. This means that Tesla does not develop and hold on to a bunch of new features over the course of the year and then unleash them in a new model all at once. It adds features one by one to the manufacturing line when they’re ready. Some customers may be frustrated to miss out on a feature here and there. Tesla, however, manages to deliver most of the upgrades as software updates that everyone gets, providing current Model S owners with pleasant surprises.

Some Tips to Preserve Flowers Fresh Longer Receiving new and lovely blossoms is among the most wonderful emotions in the world. It creates you feel loved, and unique, critical. Nothing really beats fresh flowers to mention particular feelings of love and devotion. This is actually the reason why you can tell how a celebration that is unique is from the quantity and type of flowers current, sold or whether available one to the other. Without a doubt the rose sector actually flowers online stores can not slow-down anytime soon and are booming. Weddings, Valentines Day, birthday, school, anniversaries, brand all without and the most significant instances a doubt flowers are part of it. The plants could have been picked up professionally or ordered through plants online, regardless of the means, new blossoms can present in a celebration. The challenge with receiving plants, however, is how to maintain their freshness longer. Really, merely placing them on vases filled up with water wouldn’t do the trick, here are a few established ways you'll be able to keep plants clean and sustained for times:  the easiest way to keep plants is by keeping them inside the refrigerator. Here is the reason why most flower shops have huge appliances where they keep their stock. If you have added place in the fridge (and endurance) you're able to just put the flowers before bed-time and put it within the fridge. In the morning you could arrange them again and do the same within the days.  If you are partial to drinking pop, specially the obvious ones like Sprite and 7 Up, you need to use this like a chemical to preserve the flowers fresh. Just serve a couple of fraction of mug of pop to mix within the water in the vase. Sugar is just a natural chemical and soda has high-sugar content, as you know.  To keep the petals and sepals fresh-looking attempt to apply somewhat of hairspray on the couple of plants or aroma. Stay from a length (about one feet) then provide the blossoms a fast spritz, notably to the leaves and petals.  the trick to maintaining cut flowers new is always to minimize the expansion of bacteria while in the same period give you the plants with all the diet it needs. Since it has properties for this function vodka may be used. Just blend of vodka and sugar for the water that you're going to use within the vase but make sure to modify the water daily using the vodka and sugar solution.  Aspirin is also recognized to preserve flowers fresh. Only break a pill of aspirin before you place the plants, and blend it with the water. Remember which you need to add aspirin everytime the water changes.  Another effective approach to avoid the growth of bacteria is to add about a quarter teaspoon of bleach inside the water within the vase. Mix in a few teaspoon of sugar for the blossoms and also diet will definitely last considerably longer. The number are only several of the more doable ways that you can do to make sure that it is possible to enjoy those arrangement of flowers you obtained from the person you worry about for a very long time. They could nearly last but atleast the message it offered will soon be valued inside your heart for the a long time.

When the legendary Steve Schwarzman's firm went public in 2007, I was convinced that this was merely an opportunity to take advantage of a huge spike in the stock market for the partners in Blackstone to cash out and ultimately call it a day. I saw the public offering then as an unworthy investment, which could only serve to fill the partners' pockets while they proceeded to 'mail it in' for their new shareholders. But I have been proven completely wrong. Blackstone's history since its public offering is a continued history of success stories, and I believe the current energy restructuring opportunity will be no different. Elsewhere in this book, I talk a bit about the deal it made with Linn Energy, with very advantageous terms for Blackstone. As a long-term hold, I can find no better (public) PE firm to invest in.

it is said to currently account for at least half and sometimes over 70 percent of all stock trades, which means that most trades are generated by computer programs rather than a human decision.

Continuous improvement plays an important part in day trading: you can find ways to improve your skills regardless of your current level.

The Turtle Trading Approach   You can easily find a lot of online articles regarding this approach. Here, you will look at the “lows” and “highs” of the past twenty days to determine the market signals. Remember the following principles when using the turtle trading approach:   Buy more shares if the stock's current price is above the highest point of the past twenty days. Sell your shares of the company if the current price is lower than the lowest point of the past twenty days.

In these uncertain days, bond funds are an especially important option for investors. Unlike stock funds, they have high predictability in at least these five ways: (1) The current yields (on longer-term issues) are an excellent—if imperfect—predictor of future returns. (2) The range of gross returns earned by bond managers clusters in an inevitably narrow range that is established by the current level of interest rates in each sector of the market. (3) The choices are wide. As the maturity date lengthens, volatility of principal increases, but volatility of income declines. (4) Whether taxable or municipal, bond fund returns are highly correlated with one another. Municipal bond funds are fine choices for investors in high tax brackets, and inflation-protected bond funds are a sound option for those who believe that much higher living costs will result from the huge federal government deficits of this era. (5) The greatest constant of all is that—given equivalent portfolio quality and maturity—lower costs mean higher returns. (Don’t forget that index bond funds—or their equivalent—carry the lowest costs of all.)

First, you find the “market capitalization” (“market cap” for short) by multiplying the number of shares outstanding (let’s say 100 million) by the current stock price (let’s say $100 a share). One hundred million times $100 equals $10 billion, so that’s the market cap for DotCom.com.

A call is an option to buy a stated amount of a certain stock at a fixed price—generally near the current market price—at any time during a stated period. Calls on most listed stocks are always on sale by dealers who specialize in them. The purchaser pays a generally rather moderate sum for his option; if the stock then goes up during the stated period, the rise can easily be converted into almost pure profit for him, while if the stock stays put or goes down, he simply tears up his call the way a horseplayer tears up a losing ticket, and loses nothing but the cost of the call. Therefore calls provide the cheapest possible way of gambling on the stock market, and the most convenient way of converting inside information into cash.

Morgan retaliated with a strategy that would become one of his hallmarks. He spread rumors to Wall Street that Westinghouse’s company was financially unstable, which dissuaded investors from giving Westinghouse the capital that he needed to expand the production and installation of his alternating current generators. Morgan then began an attack through stock manipulation, and moved to gain control of The Westinghouse Corporation, and thus Tesla’s patents.

The store owner was stocking the shelves, when he was approached by the menacing and imposing union goons, who were holding baseball bats in their hands. The store owner clearly gulped, looked at both men with a scared look, and then he asked, “What do you want?” “We need you to pay us some protection money, and pay your employees much better than you’re currently paying them. Or else.” “I can’t. I don’t make enough to pay some idiotic protection money, and I’m paying my employees more than minimum wage as it is, a couple of dollars more would put me out of business. You know this is illegal, right?” “Illegal? Says who? Hey Gary, do you think this is illegal?” Gary began to laugh, “Um, nope, don’t think it’s illegal. Go ahead and do what you plan on doing, Mark, I won’t stand in your way,

You get a deduction for the current value of the stock if you have owned it for more than a year. Advice: Look at the stocks in your taxable accounts to find those with the greatest appreciation and consider using those shares to fund charitable

Imagine, for instance, that someone passed a rule, in the U.S. stock market as it is currently configured, that required every stock market trade to be front-run by a firm called Scalpers Inc. Under this rule, each time you went to buy 1,000 shares of Microsoft, Scalpers Inc. would be informed, whereupon it would set off to buy 1,000 shares of Microsoft offered in the market and, without taking the risk of owning the stock for even an instant, sell it to you at a higher price. Scalpers Inc. is prohibited from taking the slightest market risk; when it buys, it has the seller firmly in hand; when it sells, it has the buyer in hand; and at the end of every trading day, it will have no position at all in the stock market. Scalpers Inc. trades for the sole purpose of interfering with trading that would have happened without it. In buying from every seller and selling to every buyer, it winds up: a) doubling the trades in the marketplace and b) being exactly 50 percent of that booming volume. It adds nothing to the market but at the same time might be mistaken for the central player in that market. This state of affairs, as it happens, resembles the United States stock market after the passage of Reg NMS. From 2006 to 2008, high-frequency traders’ share of total U.S. stock market trading doubled, from 26 percent to 52 percent—and it has never fallen below 50 percent since then. The total number of trades made in the stock market also spiked dramatically, from roughly 10 million per day in 2006 to just over 20 million per day in 2009.

The old order types were simple and straightforward and mainly sensible. The new order types that accompanied the explosion of high-frequency trading were nothing like them, either in detail or spirit. When, in the summer of 2012, the Puzzle Masters gathered with Brad and Don and Ronan and Rob and Schwall in a room to think about them, there were maybe one hundred fifty different order types. What purpose did each serve? How might each be used? The New York Stock Exchange had created an order type that ensured that the trader who used it would trade only if the order on the other side of his was smaller than his own order; the purpose seemed to be to prevent a high-frequency trader from buying a small number of shares from an investor who was about to crush the market with a huge sale. Direct Edge created an order type that, for even more complicated reasons, allowed the high-frequency trading firm to withdraw 50 percent of its order the instant someone tried to act on it. All of the exchanges offered something called a Post-Only order. A Post-Only order to buy 100 shares of Procter & Gamble at $80 a share says, “I want to buy a hundred shares of Procter & Gamble at eighty dollars a share, but only if I am on the passive side of the trade, where I can collect a rebate from the exchange.” As if that weren’t squirrely enough, the Post-Only order type now had many even more dubious permutations. The Hide Not Slide order, for instance. With a Hide Not Slide order, a high-frequency trader—for who else could or would use such a thing?—would say, for example, “I want to buy a hundred shares of P&G at a limit of eighty dollars and three cents a share, Post-Only, Hide Not Slide.” One of the joys of the Puzzle Masters was their ability to figure out what on earth that meant. The descriptions of single order types filed with the SEC often went on for twenty pages, and were in themselves puzzles—written in a language barely resembling English and seemingly designed to bewilder anyone who dared to read them. “I considered myself a somewhat expert on market structure,” said Brad. “But I needed a Puzzle Master with me to fully understand what the fuck any of it means.” A Hide Not Slide order—it was just one of maybe fifty such problems the Puzzle Masters solved—worked as follows: The trader said he was willing to buy the shares at a price ($80.03) above the current offering price ($80.02), but only if he was on the passive side of the trade, where he would be paid a rebate. He did this not because he wanted to buy the shares. He did this in case an actual buyer of stock—a real investor, channeling capital to productive enterprise—came along and bought all the shares offered at $80.02. The high-frequency trader’s Hide Not Slide order then established him as first in line to purchase P&G shares if a subsequent investor came into the market to sell those shares. This was the case even if the investor who had bought the shares at $80.02 expressed further demand for them at the higher price. A Hide Not Slide order was a way for a high-frequency trader to cut in line, ahead of the people who’d created the line in the first place, and take the kickbacks paid to whoever happened to be at the front of the line.

The true investor scarcely ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons’ mistakes of judgment.10

Global finance made so much hay, not through efficient markets but by riding up and down three interlinked giant global asset bubbles using huge amounts of leverage. The first bubble began in US equities in 1987 and ran, with a dip in the dot-com era, until 2007. It was the longest equity bull market in history, and it spread out from the United States to boost stock markets all over the world. The smart cash that was being made in those equity markets looked around for a hedge and found real estate, which began its own global bubble phase in 1997 and ran until the crisis hit in 2006. The final bubble occurred in commodities, which rose sharply in 2005 and 2006, long before anyone had heard the words “quantitative easing,” and which burst quickly since these were comparatively tiny markets, too small to sustain such volumes of liquidity all hunting either safety or yield. The popping of these interlinked bubbles combined with losses in the subprime sector of the mortgage derivatives market to trigger the current crisis.

Sull imagined wild brook trout, cold and firm in the fast, healthy current, buried in the water like ingots of precious metal. They hold fast to the bank, laurel-green with bellies of coal-fire. Wilder colors than you'd dare imagine on your own. Stock had destroyed the run--to be truthful, {his family} had--and silky mud rose off the bottom in slow veils where the Angus dropped their hooves. Do rivers have ghosts? Do trout swim in the air?

Perhaps the best-known investment paradigm is buy low, sell high. I believe that more money can be made by buying high and selling at even higher prices … . I try to buy stocks that have already had good price moves, that are already making new highs, and that have positive relative strength … . I always look for the best potential performance at the current time. Even if I think that a stock I hold will go higher, if I believe another stock will do significantly better in the interim, I will switch.

What Musk had done that the rival automakers missed or didn’t have the means to combat was turn Tesla into a lifestyle. It did not just sell someone a car. It sold them an image, a feeling they were tapping into the future, a relationship. Apple did the same thing decades ago with the Mac and then again with the iPod and iPhone. Even those who were not religious about their affiliation to Apple were sucked into its universe once they bought the hardware and downloaded software like iTunes. This sort of relationship is hard to pull off if you don’t control as much of the lifestyle as possible. PC makers that farmed their software out to Microsoft, their chips to Intel, and their design to Asia could never make machines as beautiful and as complete as Apple’s. They also could not respond in time as Apple took this expertise to new areas and hooked people on its applications. You can see Musk’s embrace of the car as lifestyle in Tesla’s abandonment of model years. Tesla does not designate cars as being 2014s or 2015s, and it also doesn’t have “all the 2014s in stock must go, go, go and make room for the new cars” sales. It produces the best Model S it can at the time, and that’s what the customer receives. This means that Tesla does not develop and hold on to a bunch of new features over the course of the year and then unleash them in a new model all at once. It adds features one by one to the manufacturing line when they’re ready. Some customers may be frustrated to miss out on a feature here and there. Tesla, however, manages to deliver most of the upgrades as software updates that everyone gets, providing current Model S owners with pleasant surprises.

Science constantly furnishes us with astonishing ideas about the nature of reality. Physics tells us that there may be an infinite number of universes, of which ours is just one, and that perhaps two particles in no physical contact with one another can somehow influence each other’s properties. From evolutionary biology we learn that birds are the only living descendents of dinosaurs. Geologists reveal that, as a result of the current trajectory of the Earth’s tectonic plates, Australia will eventually collide with Alaska. Contemporary educated people have grown used to the idea that, at least where the causal structure of the world uninfluenced by human agency is concerned, our stock of“commonsense” assumptions and principles is systematically unreliable as a guide to the facts. Our everyday scale of perceptions, along both its temporal and its spatial dimensions, is simply too pinched and unrepresentative to be trusted as a direct window onto wider truths, at least about physics, geology, astronomy, microbiology, and so on.

Gates Foundation currently holds corporate stocks and bonds in drug companies like Merck, GSK, Eli Lilly, Pfizer, Novartis, and Sanofi.69 Gates also has heavy positions in Gilead, Biogen, AstraZeneca, Moderna, Novavax, and Inovio. The foundation’s website candidly declares its mission to “seek more effective models of collaboration with major vaccine manufacturers to better identify and pursue mutually beneficial opportunities.

Youth! There is nothing like it. It’s absurd to talk of the ignorance of youth. The only people to whose opinions I listen now with any respect are people much younger than myself. They seem in front of me. Life has revealed to them her latest wonder. As for the aged, I always contradict the aged. I do it on principle. If you ask them their opinion on something that happened yesterday, they solemnly give you the opinions current in 1820, when people wore high stocks, believed in everything, and knew absolutely nothing.

Knowing how to properly value a business gives you the perfect investing edge as it allows to disregard what the market thinks and turn that into an advantage by exploiting market mispricing. However, don’t expect precision, this is also what makes value investing relatively easy, you just need to compare the current stock price to your range of values.

How do accountants measure the value of assets? For most fixed and long-term assets, such as land, buildings, and equipment, they begin with what you originally paid for the asset (historical cost) and reduce that value for the aging of the asset (depreciation or amortization). For short-term assets (current assets), including inventory (raw materials, works in progress, and finished goods), receivables (summarizing moneys owed to the firm), and cash, accountants are more amenable to the use of an updated or market value. If a company invests in the securities or assets of another company, the investment is valued at an updated market value if the investment is held for trading and historical cost when it is not. In the special case where the holding comprises more than 50 percent of the value of another company (subsidiary), the firm must record all of the subsidiary's assets and liabilities on its balance sheet (this is called consolidation), with a minority interest item capturing the percentage of the subsidiary that does not belong to it. Finally, you have what are loosely categorized as intangible assets. While you would normally consider items such as brand names, customer loyalty, and a well-trained work force as intangible assets, the most encountered intangible asset in accounting is goodwill. When a firm acquires another firm, the price it pays is first allocated to the existing assets of the acquired firm. Any excess paid becomes goodwill and is recorded as an asset.

The true investor scarcely ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other people’s mistake of judgement.

The logic of selling is crystal-clear: What you paid for an investment should not determine whether you bail out. If you think a stock is more valuable than its current price, you should keep it. If its current price is higher than what you think it is worth, you should sell it. And if you desperately need cash, of course that justifies a sale. But how much you paid for it is beside the point.

Even the simplest multiples are defined and computed differently by different analysts. A PE ratio for a company can be computed using earnings from the last fiscal year (current PE), the last four quarters (trailing PE), or the next four quarters (forward), yielding very different estimates. It can also vary depending on whether you use diluted or primary earnings. The first test to run on a multiple is to examine whether the numerator and denominator are defined consistently. If the numerator is an equity value, then the denominator should be an equity value as well. If the numerator is a firm value, then the denominator should be a firm value as well. To illustrate, the PE ratio is a consistently defined multiple since the numerator is the price per share (which is an equity value) and the denominator is earnings per share (which is also an equity value). So is the enterprise value to EBITDA multiple since the numerator and denominator are both measures of operating assets; the enterprise value measures the market value of the operating assets of a company, and the EBITDA is the cash flow generated by the operating assets. In contrast, the price-to-sales ratio and price to EBITDA are not consistently defined since they divide the market value of equity by an operating measure. Using these multiples will lead you to finding any firm with a significant debt burden to be cheap.

Instead, calculate a stock’s price/earnings ratio yourself, using Graham’s formula of current price divided by average earnings over the past three years.

Understanding Financial Risks and Companies Mitigate them? Financial risks are the possible threats, losses and debts corporations face during setting up policies and seeking new business opportunities. Financial risks lead to negative implications for the corporations that can lead to loss of financial assets, liabilities and capital. Mitigation of risks and their avoidance in the early stages of product deployment, strategy-planning and other vital phases is top-priority for financial advisors and managers. Here's how to mitigate risks in financial corporates:- ● Keeping track of Business Operations Evaluating existing business operations in the corporations will provide a holistic view of the movement of cash-flows, utilisation of financial assets, and avoiding debts and losses. ● Stocking up Emergency Funds Just as families maintain an emergency fund for dealing with uncertainties, the same goes for large corporates. Coping with uncertainty such as the ongoing pandemic is a valuable lesson that has taught businesses to maintain emergency funds to avoid economic lapses. ● Taking Data-Backed Decisions Senior financial advisors and managers must take well-reformed decisions backed by data insights. Data-based technologies such as data analytics, science, and others provide resourceful insights about various economic activities and help single out the anomalies and avoid risks. Enrolling for a course in finance through a reputed university can help young aspiring financial risk advisors understand different ways of mitigating risks and threats. The IIM risk management course provides meaningful insights into the other risks involved in corporations. What are the Financial Risks Involved in Corporations? Amongst the several roles and responsibilities undertaken by the financial management sector, identifying and analysing the volatile financial risks. Financial risk management is the pinnacle of the financial world and incorporates the following risks:- ● Market Risk Market risk refers to the threats that emerge due to corporational work-flows, operational setup and work-systems. Various financial risks include- an economic recession, interest rate fluctuations, natural calamities and others. Market risks are also known as "systematic risk" and need to be dealt with appropriately. When there are significant changes in market rates, these risks emerge and lead to economic losses. ● Credit Risk Credit risk is amongst the common threats that organisations face in the current financial scenarios. This risk emerges when a corporation provides credit to its borrower, and there are lapses while receiving owned principal and interest. Credit risk arises when a borrower falters to make the payment owed to them. ● Liquidity Risk Liquidity risk crops up when investors, business ventures and large organisations cannot meet their debt compulsions in the short run. Liquidity risk emerges when a particular financial asset, security or economic proposition can't be traded in the market. ● Operational Risk Operational risk arises due to financial losses resulting from employee's mistakes, failures in implementing policies, reforms and other procedures. Key Takeaway The various financial risks discussed above help professionals learn the different risks, threats and losses. Enrolling for a course in finance assists learners understand the different risks. Moreover, pursuing the IIM risk management course can expose professionals to the scope of international financial management in India and other key concepts.

Currently, I am very focused on dividends - accepting that few shares are likely to show capital growth in the short term. From my higher-yielding stocks, I am hoping for maintenance of dividends - a dividend increase is a bonus; a "passing" or slashing of the payment is bad news. These board decisions reflect not only the profitability/debt levels of the company, but also its attitude to shareholder dividends, so past dividend history is an important consideration - as is the size of directors' holdings.

Here’s how to calculate the dividend yield of a stock: Take the annual dividend payment ($1.56 in this case) and divide it by the current price of the stock ($41.55). In this case, that gives you 0.03754513, or 3.75%. 3.75% is Coke’s current dividend yield.

To calculate the market capitalization of a company, multiply the current market price of a stock by the number of outstanding shares. The number of outstanding shares refers to the number of shares that have been sold to the public.

Arbitrages: The purchase of a security and the simultaneous sale of one or more other securities into which it was to be exchanged under a plan of reorganization, merger, or the like. Liquidations: Purchase of shares which were to receive one or more cash payments in liquidation of the company’s assets. Operations of these two classes were selected on the twin basis of (a) a calculated annual return of 20% or more, and (b) our judgment that the chance of a successful outcome was at least four out of five. Related Hedges: The purchase of convertible bonds or convertible preferred shares, and the simultaneous sale of the common stock into which they were exchangeable. The position was established at close to a parity basis—i.e., at a small maximum loss if the senior issue had actually to be converted and the operation closed out in that way. But a profit would be made if the common stock fell considerably more than the senior issue, and the position closed out in the market. Net-Current-Asset (or “Bargain”) Issues: The idea here was to acquire as many issues as possible at a cost for each of less than their book value in terms of net-current-assets alone—i.e., giving no value to the plant account and other assets. Our purchases were made typically at two-thirds or less of such stripped-down asset value. In most years we carried a wide diversification here—at least 100 different issues.

Stock Guide material includes “Earnings and Dividend Rankings,” which are based on stability and growth of these factors for the past eight years. (Thus price attractiveness does not enter here.) We include the S & P rankings in our Table 15-1. Ten of the 15 issues are ranked B+ (= average) and one (American Maize) is given the “high” rating of A. If our enterprising investor wanted to add a seventh mechanical criterion to his choice, by considering only issues ranked by Standard & Poor’s as average or better in quality, he might still have about 100 such issues to choose from. One might say that a group of issues, of at least average quality, meeting criteria of financial condition as well, purchasable at a low multiplier of current earnings and below asset value, should offer good promise of satisfactory investment results.

2.50% and 4.50% today, it is probably reasonably fairly priced (in the current interest rate environment). If the dividend yield is below 2.50%, the stock is probably over-priced, and you should wait to purchase it. If the dividend yield is over 4.50%, there is probably something wrong. Either the company has an enormous amount of debt or underfunded pension obligations (like AT&T), which makes the stock more risky. Or the market is pricing in the chance of a dividend cut. Either way, you are better off sticking with the 2.50% to 4.50% dividend yield range. That’s where the more normal healthy companies will be found.

What are your strengths? How do you know that? What do you need to work on? How do you know that? How are you working on this area? Is your company helping? When was your last promotion? How was the promotion communicated to you? What is the one thing you believe you did to earn this promotion? When was your last compensation increase? (Compensation = base salary + bonus and/or stock.) Do you feel fairly compensated? If not, what would you consider fair compensation? What facts do you base that opinion on? Have you told this to your manager? When was the last time you received useful feedback from your manager? What compliment do you wish you could receive about your work? Are you learning from your manager? What was the last significant thing you learned from them? What was the last thing you built at work that you enjoyed? What was your last major failure at work? What’d you learn? Are you clear about the root causes of that failure? What was the last piece of feedback you received (from anyone) that substantially changed your working style? Who is your mentor?1 When was the last time you met with them? When was your last 360 review?2 What was your biggest lesson? When did you last change jobs? Why? When did you last change companies? Why? What aspect of your current job would you bring with you to a future gig? What is your dream job? (Role, company, etc.) What is a company you admire? What attributes do you admire? Who is a leader that you admire? What are the qualities of that leader that you admire?

Our study of the various methods has led us to suggest a foreshortened and quite simple formula for the valuation of growth stocks, which is intended to produce figures fairly close to those resulting from the more refined mathematical calculations. Our formula is: Value = Current (Normal) Earnings × (8.5 plus twice the expected annual growth rate) The growth figure should be that expected over the next seven to ten years.

Without an understanding of the variables affecting growth, an investor cannot assess intrinsic value so cannot gauge whether or not something is a value investment at its current price.

Selling short: You borrow a stock and sell it to someone else with a promise to repurchase it at a later date. This is done when you think a stock will go down in price, allowing you to sell it at the current market price and repurchase it at a lower price, then to sell it long or keep it with the expectation that the price will recover. Selling short is extremely risky because if a stock continues to increase in value, you could end up having to rebuy it at a price much higher than what you sold it for.

Adequate Size of the Enterprise All our minimum figures must be arbitrary and especially in the matter of size required. Our idea is to exclude small companies which may be subject to more than average vicissitudes especially in the industrial field. (There are often good possibilities in such enterprises but we do not consider them suited to the needs of the defensive investor.) Let us use round amounts: not less than $100 million of annual sales for an industrial company and, not less than $50 million of total assets for a public utility. 2. A Sufficiently Strong Financial Condition For industrial companies current assets should be at least twice current liabilities—a so-called two-to-one current ratio. Also, long-term debt should not exceed the net current assets (or “working capital”). For public utilities the debt should not exceed twice the stock equity (at book value). 3. Earnings Stability Some earnings for the common stock in each of the past ten years. 4. Dividend Record Uninterrupted payments for at least the past 20 years. 5. Earnings Growth A minimum increase of at least one-third in per-share earnings in the past ten years using three-year averages at the beginning and end. 6. Moderate Price/Earnings Ratio Current price should not be more than 15 times average earnings of the past three years.

Here’s how it is done. Imagine a hypothetical mutual savings and loan, which we’ll call Magic Wand S&L, or MW, with $10 million in liquidation or book value, and net income of $1 million per year. If MW were a stock bank with one million shares outstanding, each share would have a book value of $10 and earn $1 per share, which is 10 percent of book value. Suppose that if there were such a thing as MW stock, it would, as is typical, trade at one times book value, or $10 per share. Management decides to “convert” MW to a stock savings and loan and issue for the first time one million shares of stock at $10 per share, for proceeds of $10 million. After this initial public offering, or IPO, MW has $10 million in new cash plus the $10 million in equity previously owned by the depositors, for a new total of $20 million in equity. Each share now has a book value of $10 cash plus $10 in contributed equity, for a total of $20. What will the new shares sell for in the marketplace? The contributed equity ought to be worth $10 based on the current market price of comparable stock S&Ls and the $10 in cash ought to be worth another $10, so once the public understands this, we expect the new stock to trade at about $20.

Dividend yield between 3% and 4% Company at least 10 years old and operating in a stable business 5-year average ROE greater than 20% Net debt/average three-year net income is 4.0 or less Call option premium/current stock price should be at least 1% for every 30 days until expiration