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How to Value Stocks Like a Guru #1 – The Cash Flow Analysis

How to Value Stocks Like a Guru #1 – The Cash Flow Analysis

Basics, Investing, Valuation
What you will Learn How to differentiate between price and valueHow to use the Cash Flow Analysis, a simple tool for estimating a company's valueTo what Warren Buffett attributes his investing success My wife raised her eyebrows as I walked into the living room with the embarrassingly large Nintendo box under my arm. "How much did you pay for that?" she asked skeptically. "I paid what it cost."  This was my way of hiding the price of the Nintendo. Perhaps a better way to address this would be to extol the Nintendo's value - the fun and fellowship we will get by playing together as a family. Price is what you pay; value is what you get.Warren Buffett Mr. Buffett frequently emphasizes the difference between price and value when investing. This implies two things;…
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How to Get Approved for Options Trading – With Pictures!

How to Get Approved for Options Trading – With Pictures!

Basics, Investing, Options
Stock options are excellent tools that can boost investment returns, limit risk, and generate income. To use these tools, you must be approved for options trading by your brokerage. In this article, we will walk you through applying for options privileges with TD-Ameritrade and Robinhood [This is a referral link, if you sign up through this link we both get a free stock worth $3-$150!]. The overall process will be similar for any broker, but specifics may differ. What you will learn: Gaining options privileges at Robinhood through mobile or desktopGaining options privileges at TD-Ameritrade Robinhood 1. After signing into your account, you need to get to your investing settings. On a browser, you do this by clicking on 'Account' in the top right corner and then 'Settings.'  A. On…
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Warren Buffett’s Letters – How to use your extra cash – 1969-1970

Warren Buffett’s Letters – How to use your extra cash – 1969-1970

guru, Investing, Warren Buffett
This is the third post in a series that will explore the successes, failures, and teachings of Warren Buffett through his annual Berkshire Hathaway letters to shareholders. To start at the beginning, click here. What you will learn How do businesses use their extra cash?How did Warren Buffett choose to use his extra cash in the early years?Warren's personable approach with his managers and workers. What to do with your extra cash Readers of Warren Buffett's early shareholder letters will be aware that Mr. Buffett was frustrated at the prospects of Berkshire's primary business, textiles. It seemed like no matter how much money you throw into increasing efficiency, you could never count on increasing your returns.  He notes in the 1970 letter: "Four years ago your management committed itself to the development of…
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Leaders of Men – Inspiring words from Vince Lombardi

Leaders of Men – Inspiring words from Vince Lombardi

Football, Leader Quotes, Leaders
Generals, Coaches. Leaders of men who inspire greatness, driving us past pain and fear to the jubilation of glory. To see the first post in this series, Click Here: Vince Lombardi had such an impact on the NFL that the league has named the Super Bowl Trophy after him. The Green Bay Packers had not had a winning season in 12 years when they hired Lombardi in 1959. His impact was immediate and sustained - he never had a losing season in 10 years as a head coach. In that time he won 5 championships, including 3 NFL Championship and the first two Super Bowls. Lombardi was inspired by his immigrant parents and catholic faith, driving his teams to strive towards perfection and to live above reproach. He came to represent leadership…
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Making Money With Options

Making Money With Options

Investing, Options
Yes, you CAN get paid to wait! This is the third in a series of posts on options. This series will help you to understand options contracts, their strengths, weaknesses, and risks. Most importantly, this series will make you a more successful investor. To go to the first post on options, click here. Before we get into the meat of learning options trading, I want to whet your appetite with another example of how options trading can boost your investing returns. It is totally possible to earn income on stocks you already own or you want to own in the future. Take a look at this chart for the microchip company Micron Technology: Micron Stock Price from January 2017 to April 2020 As you can see, Micron has had quite…
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Warren Buffett’s Letters – Building a Firm Foundation – 1966-68

Warren Buffett’s Letters – Building a Firm Foundation – 1966-68

guru, Investing, Warren Buffett
This is the second post in a series which will explore the successes, failures, and teachings of Warren Buffett through his annual Berkshire Hathaway letters to shareholders. To start at the beginning, click here. How Do You Build a Company With a Firm Foundation? Warren Buffett's propensity to large cash balances and acquisitions seems to have started early. We are already seeing the transformation of Berkshire Hathaway from a struggling textile business in New England to the thriving conglomerate it is today in these 1966-1968 reviews. From 1960 to 1966, the net worth of Berkshire Hathaway's decreased from $37,981,820 to $29,494,920 - a 22% decline! Mr. Buffett wryly referred to this outcome at the end of his 1967 letter, writing, "We feel it is essential that we not repeat the…
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Leaders of Men – Inspiring Words from Alexander the Great

Leaders of Men – Inspiring Words from Alexander the Great

Generals, Leaders
Generals, Coaches. Leaders of men who inspire greatness, driving us past pain and fear to the jubilation of glory. To see the first post in this series, click here. Alexander the Great, also known as Alexander III of Macedon, may have been one of the greatest military minds of all time - he never lost a battle while expanding his empire to be one of the largest in the history of the world. One of the keys to his success is said to be the loyalty of his troops. He was famously tutored by Aristotle. His personality was complex, being both stubborn but also teachable. He was said to have been an avid reader with a love for philosophy, her patronized both the arts and sciences. Late in his life,…
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