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2017-01-12

2017-01-11

  • richday101 commented on The Science of Hitting's article 01-11 13:20
    How to Analyze a Company
    A fellow GuruFocus reader recently sent me an email with the following question: “Which books would you recommend if I want to start investing in...
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    richday101 01-11 13:20
    • The Science of Hitting

      Thanks for the question. I run my Margin Acct and Tax-sheltered Accts differently. I haven't purchased bonds in 8 years. Yes, I have plenty of cash currently in my Margin Acct.

      For my Margin Acct, I go from 100% stocks (e.g. 2009) to 80% cash (in mid-2008 and late-2015). In 2009 and 2010, I purchased JNJ, PG, WMT, ADT, BAX, GD, LMT, CSCO, MSFT, DTV, DST, EBAY, FISV, BBY, GME, HRB, etc., but sold all my US stocks in late 2015 as I had a 1-yr project and they were overvalued. I hold onto my Canadian dividend paying stocks (e.g. RY, TD, BNS, BMO, etc.) as we get a Dividend Tax Credit for owning these shares in Canada.

      In my Tax-deferred Accts, I hold 100% stocks for the long-run (mostly blue-chip dividend paying, US and CDN).

      I am now getting back into analysing stocks but I'm not finding many undervalued opportunities. It feels like 2000 and 2007 all over again. I'd rather sit and wait than take undue risk. I may look at opportunities in Europe, especially in the UK (looks undervalued and no tax on dividends).

      My apologies for the long answer.

2017-01-10

  • richday101 commented on The Science of Hitting's article 01-10 22:40
    How to Analyze a Company
    A fellow GuruFocus reader recently sent me an email with the following question: “Which books would you recommend if I want to start investing in...
    View all 7 comments
    richday101 01-10 22:40
    • Wonderful article and great discussion. I'm sure Costco (COST) was chosen because it is a fabulous business with an easy to understand business and very predictable fundamentals with good growth. I find filling in all the fundamental values suggested could be a lot of unnecessary work and vert time consuming. I used to use this technique for over 100 stocks but found by the time I was done all the data was obsolete and I had to start over.

      As a result, I look at valuation first using GuruFocus. It is easy to see COST is overvalued trading at a P/E of 29.5 (med of 24.6), P/B of 5.9 (med of 2.9), P/S of 0.6 (med of 0.4). COST has been overvalued for the last 3 years trading above median P/E, P/B, P/S. In fact most of the high quality stocks are overvalued.

      I look at valuation first using several GuruFocus screens. I then study the summary page, 15 year Financials and the 15 year Interactive Charts. If the stock is trading above most valuation metrics e.g. Med P/E, Med P/B, Med P/S, Earning Power, Intrinsic Value, Enterprise Value, I fill in these values into a spreadsheet. I also fill in several quality metrics as we are always trading off between quality and value. I only buy stocks when P/Value < 0.75. Presently, I find 80% of my stock list overvalued, and <5% are in the "Buys" range, compared to 90% in March 2009. 

      I also find Valueline and Standard & Poors reports very useful.

       

       
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