Fundamentals

Using The Share Price As a Guide To Buy And Sell

There is a difference between strategies for share market investing and strategies for picking shares, and many retail investors ignore the investing strategies in favour of share picking tactics. To stgelop a strategy for share market investing you start with defining your personal investment goals.  While a goal of making as much money as I…

Tools for Finding Safer Shares (Part 2) – The Quick Ratio

Something happened a short time ago – January 24th, 2011 – that shines a spotlight on the issue of finding safer shares.  Australia’s giant retailer, Woolworths (WOW), lowered its guidance for the first half of 2011.  Today’s earnings release cited the following conditions that led to the revised forecast: •    Consumer Confidence Levels•    Inflation•    Interest…

How To Make Money By Thinking Big Picture

Think of top down investing as a “big picture” strategy.  The big picture is the global market and all it encompasses.  If you think of the global market as a forest, if it looks green and healthy, you enter the forest looking for the healthiest trees.  When you find a grove of healthy trees, you…

Tools for Finding Safer Shares (Part 3) – The Cash Conversion Cycle

If liquidity is a key metric to consider when looking for safer shares, what is the best measure of liquidity?  Financial websites tell us to focus on a combination of the Current Ratio and the Quick Ratio.  As you know, both have flaws relating to the time required to turn assets into available cash.  …

Debt Ratios – Tools for Finding Safer Shares (Part 1)

Considering the wild roller coaster ride the world’s markets have put us through the last few years, it is no wonder even the most aggressive retail investors are looking for less risky investments.  Ratio analysis can provide a roadmap and of the many financial ratios available, the ones that offer us the best clues are…

Return on Equity (ROE) – Is It the ‘Magic Number’ of Share Picking Tools?

Although some share market skeptics claim most share picking tools yield results no better than throwing darts at a wall, there are numbers any investor can look at to help pick solid investments.   Return on Equity (ROE) is one such number.  Simply put, ROE measures how well a company makes use of the money its…

How to Analyse Company Financials

For many investors financial analysis forms the foundation of their investment decision.  In their minds, it is the essential component in the process of evaluating a company as a potential share market investment.  By digging into the crown jewels of a company’s annual report -the income statement; the statement of comprehensive income; the balance sheet;…