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| 02/05/04 | Discounting rate # |
Lal S
 |
Hi All,
This is regarding discounting rate that can be used for discounting future cash flows of more than 10 years. Are there any theories other than Modigliani and Miller for including the tax factor and other parameters like cost of funds, inflation etc....If any body knows any good research/university papers that might also help.....
Thanks
Lal
Post Reply Reply by Private Message (new win) |
| 01/18/04 | re: Stock Analysis # |
David Bojanowski
|
> Melanie Hollands wrote:
>In my experience, there is no single method (NO method) that is right all the time. The most important thing in trading / investing is to pick the method that you are most comfortable with, one that fits your particular personality, natural intellectual abilities, and interests and build from that.
>
>Some books I highly recommend are:
[deleted]
Melanie gave some good advice and recommended some popular investment books. Let me add "Trading for a Living" by Alexander Elder to the list. Despite the title, the book has nothing to do with being a day trader. In fact, the book was written long before the Internet became popular and the average Joe knew what a "day trader" meant.
The book is a great source of information regarding technical analysis. I highly recommend it. If you get the book, pay close attention to the parts that describe the MACD and the MACD Histogram. Also pay attention to MACD bullish and bearish divergences.
I'm new to Ryze...I'm not sure if we can mention the names of other website on this forum. If this is not allowed, please pardon me. Anyway, there is a free website with great free techical analysis charts at www.ClearStation.com. I have no affiliation with the site, nor Etrade, which owns ClearStation. If you look at the site you'll find an Education section with Adobe .pdf files that give a quick summary of Elder's "Trading for a Living" book. Its free and worth your time if you're new to technical analysis.
Take care,
Dave
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| 01/17/04 | re: JDSU # |
Patrick Loc
|
Hi Melanie,
What are thoughts on Sprint PCS since you mentioned LU? PCS ran up the past week yet Nextel is down on heavy volume. I've zero positions in these stocks currently.
Thanks,
Pat
> Melanie Hollands wrote:
> JDSU, the stock of optics company JDS Uniphase, is up 50% now, since I posted on this stock on November 9. The stock is up nearly 15% today alone on teh back of strong results from networker Juniper.
>
>I am still holding the stock, although I had lightened up one third of my position on monday to rotate that portion of the capital into Lucent. At this stage, I intend to hold the balance of my JDSU position. The chart still looks strong to me. But the top of the channel is closing in and I would expect it to pullback there at around $5.5. But like all my positions, I take it as it comes.
>
>Cheers
>
>Melanie Hollands
>President
>Koala Capital, LLC Post Reply Reply by Private Message (new win) |
| 01/16/04 | JDSU # |
Melanie Hollands
 |
JDSU, the stock of optics company JDS Uniphase, is up 50% now, since I posted on this stock on November 9. The stock is up nearly 15% today alone on teh back of strong results from networker Juniper.
I am still holding the stock, although I had lightened up one third of my position on monday to rotate that portion of the capital into Lucent. At this stage, I intend to hold the balance of my JDSU position. The chart still looks strong to me. But the top of the channel is closing in and I would expect it to pullback there at around $5.5. But like all my positions, I take it as it comes.
Cheers
Melanie Hollands
President
Koala Capital, LLCPost Reply Reply by Private Message (new win) |
| 01/16/04 | re: re: Stock Analyses # |
Patrick Loc
|
I think determining profitable investments require melting three disciplines: Quantitative, Fundamental and Technical.
Quant models show WHERE to invest.
Fundamental models reveal WHAT to invest.
Technical models tell WHEN to invest.
Of course, it seems simple, but not easy.
Patrick Loc, CFA
> Ananda Chakravarty wrote:
>
>I've always resorted to fundamentals, then added to the mix current events analysis. Current events can mean cyclicals for retail for instance, adjacent industry trends, and leading indicators, etc. What's critical is the time frame for me. A six month stock (buying long) in lets say telecom with strong fundamentals with a sudden dramatic squeeze from chip vendors overseas would definitely put a damper on the stock pricing, and hence my analysis would change accordingly.
>
>When I say fundamentals, I mean two forms - I do a full valuation of the company first, usually with DCF (discounted cash flows), then build on that with a good, better, best model. I clean it up with a multiples analysis versus other companies in the industry to validate. This gives me an estimate of the current value of the company - I compare to current stock prices, determine if there is any significant investor sentiment that drives over/underpricing and then adjust.
>
>If you remember Jack Welch's saying, #1 or #2. I adhere to that, well, almost. I'm always looking for the underdog that's going to overturn the main player in an industry - so it's #2 or #3 for me. These are the real growth players who will push aside bureacracy to beat the top dog (no pun intended).
>
>My customers have always supported this method, but generally they don't know what I put into the back end.
>
>I'm very much against technical analysis (although my investor sentiment check does represent some basics of technical analysis). It's too much market timing and based on flimsy arguments. If the efficient market hypothesis is even weakly true (i.e. the market is always efficient-except for insider trading) then market timing just doesn't work. It's only good for short term gains, and even then I wouldn't count on it for anything more than hedging bets.
>
>Hope my answer gives you some insight - each analyst has their own techniques, so don't take it as gospel.
>
>Ananda
>
>> Janny W wrote:
>> Hi All,
>>
>>When you analyze stock valuation including its trends, what method (e.g., technical analysis or fundamental analysis or others) is going to provide the most acurate result? I would like to know your opinion based on your work experience in managing your client's portfolios. Thanks in advance.
>>
>>Regards,
>>
>>Janny Post Reply Reply by Private Message (new win) |
| 01/13/04 | re: Stock Analyses # |
Ananda Chakravarty
 |
I've always resorted to fundamentals, then added to the mix current events analysis. Current events can mean cyclicals for retail for instance, adjacent industry trends, and leading indicators, etc. What's critical is the time frame for me. A six month stock (buying long) in lets say telecom with strong fundamentals with a sudden dramatic squeeze from chip vendors overseas would definitely put a damper on the stock pricing, and hence my analysis would change accordingly.
When I say fundamentals, I mean two forms - I do a full valuation of the company first, usually with DCF (discounted cash flows), then build on that with a good, better, best model. I clean it up with a multiples analysis versus other companies in the industry to validate. This gives me an estimate of the current value of the company - I compare to current stock prices, determine if there is any significant investor sentiment that drives over/underpricing and then adjust.
If you remember Jack Welch's saying, #1 or #2. I adhere to that, well, almost. I'm always looking for the underdog that's going to overturn the main player in an industry - so it's #2 or #3 for me. These are the real growth players who will push aside bureacracy to beat the top dog (no pun intended).
My customers have always supported this method, but generally they don't know what I put into the back end.
I'm very much against technical analysis (although my investor sentiment check does represent some basics of technical analysis). It's too much market timing and based on flimsy arguments. If the efficient market hypothesis is even weakly true (i.e. the market is always efficient-except for insider trading) then market timing just doesn't work. It's only good for short term gains, and even then I wouldn't count on it for anything more than hedging bets.
Hope my answer gives you some insight - each analyst has their own techniques, so don't take it as gospel.
Ananda
> Janny W wrote:
> Hi All,
>
>When you analyze stock valuation including its trends, what method (e.g., technical analysis or fundamental analysis or others) is going to provide the most acurate result? I would like to know your opinion based on your work experience in managing your client's portfolios. Thanks in advance.
>
>Regards,
>
>Janny Post Reply Reply by Private Message (new win) |
| 01/10/04 | Stock Analysis # |
Melanie Hollands
|
Hi Janny,
I think that is a great question, and a very difficult one to answer in an unambigious way.
I am a fundamental analyst, and in trading I tend to be a fundamental / catalytic trader. This means that my training and background is largley in fundamental alalysis and I trade off of that and also iminent catalysts that I believe will move a stock in one direction or another. I supplement this fundamental analysis with some technical analisis to help me determine entry and exit points in a stock, and also to help me determine what I call the "energy level" in a stock - ies; how far (on a % basis) I think it will move. So, while I use a combination of analytic methods to refine my stock selection and management of positions, the basis of my approach is fundamental.
Now, while my background and comfort level is primarily with fundamental analysis, technical analysis is also a great method. However, often the two forms of analysis will lead to a different stock selection result. Technical analysis, very broadly speaking, deals with the price and vollume action of a stock - although it is much more detailed than that and I am sure the many technical analysts / traders in this group will have more to add.
In my experience, there is no single method (NO method) that is right all the time. The most important thing in trading / investing is to pick the method that you are most comfortable with, one that fits your particular personality, natural intellectual abilities, and interests and build from that.
Some books I highly recommend are:
Market Wizards (the first book, written in 1989 I think, is the best in my opinion), by Jack Schwaeger. I personally refer to this as "The Bible". This is a seried of interviews with leading traders some of whom are fundamental traders and some are techncial traders. All have been highly successful with their preferred methods.
Technical Analysis of Stock Trends, by Edwards and McGee (Technical analysis focus)
Security Analysis, Graham and Dodd (Fundamental analysis focus)
Investment Valuation, Aswath Damodaran
Valuation, Copeland, Koller, Murrin
Now, these valuation books discuss a variety of different methods of valuation - such as those based on sales, growth rates, cash flow, earnings, book value, enterprise valuation methods, options pricing methods. It gets rather detailed and, I think can be confusing. But keep in mind that company economics (and, therefore, earnigns power) varies by sector and the particular economics and characteristics of that sector. So, for example, companies in a high fixed asset / fixed cost business (telecom is one example) have different economic characteristics from and will be valued differently than companies in a low fixed cost, high earnings business (examples include some internet companies, certain financials and a bunch of others).
Its complicated, yes. But choose the method - fundamental or technical - that you are most comfortable with. I believe that the best way to get better accuracy is to make smart (ie; more accurate) assumptions that go into your valuation decisions and to dig and dig to get high quality (ie; correct) information. Those things go a long way to lifting the accuracy level in stock picking.
Cheers
Melanie Hollands
President
Koala Capital, LLCPost Reply Reply by Private Message (new win) |
| 01/10/04 | Stock Analyses # |
Janny W
 |
Hi All,
When you analyze stock valuation including its trends, what method (e.g., technical analysis or fundamental analysis or others) is going to provide the most acurate result? I would like to know your opinion based on your work experience in managing your client's portfolios. Thanks in advance.
Regards,
Janny Post Reply Reply by Private Message (new win) |
| 01/09/04 | JDSU part 2 # |
Melanie Hollands
|
FYI, I wrote my JDSU post on Wednesday, January 7, when the stock was up 20% on its November 9 level. So, the 20% number applies to the stock's price as of Wednesday. In the next two trading days, the stock has moved up more and, at $4.47 is now up around 30% on its November 9, 2003, level. Just FYI and putting the dates and numbers in perspective.
Cheers
Melanie HollandsPost Reply Reply by Private Message (new win) |
| 01/09/04 | re: re: Finance for Development # # |
Simon Ho
 |
Hey Peter,
There are many financial firms both in the US and Europe that creates financing vehicles for developing nations like those in Africa and South America.
Most create strategic alliances with clients to provide a platform of custom, innovative services for hedge funds, broker/dealers, market makers and as well as mutual fund managers, securities fund managers and insurance companies.
These firms provides traditional financing, stock loan, swaps and Contracts for Differences (CFDs). Soft dollar and directed commission products are also available internationally and firms also offer a full complement of margin and collateral management services, including structured collateralized financing solutions.
Hope this answer your question.
Regards
Simon
> Peter Burgess wrote:
> Dear Colleagues
>
>I don't know whether anyone can help.
>
>Does anyone know of any investment vehicles that are attracting funds in, for example the USA or Europe and using the funds in developing countries, for example in Africa or South America.
>
>Typically what are the investment parameters used to make investments, and what has been the track record of their investment performance.
>
>There are two reasons for the questions: (1) I very much want to know the answers; and, (2) I think the answers might well indicate the tremendous information gap that exists when it comes to planning and managing investment fund flows to finance development.
>
>Sincerely
>
>Peter Burgess Post Reply Reply by Private Message (new win) |
| 01/08/04 | JDSU - Nice Rebound in the Last Two Months # |
Melanie Hollands
|
JDSU has moved up nicely since I posted my original comment about the stock on November 9, 2003. The stock is up 20% since that time. I added more to the position yesterday and had monster position, but took some off this morning. I still have big position and am still holding. I may sell the position after the number tomorrow at 8.30AM, but like all my positions I take it as it comes. If we gap on number, I'm thinking I'll sell my JDSU position.
Cheers
Melanie Hollands
President
Koala CapitalPost Reply Reply by Private Message (new win) |
| 12/20/03 | re: Finance for Development # # |
Peter Burgess
|
Dear Colleagues
I don't know whether anyone can help.
Does anyone know of any investment vehicles that are attracting funds in, for example the USA or Europe and using the funds in developing countries, for example in Africa or South America.
Typically what are the investment parameters used to make investments, and what has been the track record of their investment performance.
There are two reasons for the questions: (1) I very much want to know the answers; and, (2) I think the answers might well indicate the tremendous information gap that exists when it comes to planning and managing investment fund flows to finance development.
Sincerely
Peter BurgessPost Reply Reply by Private Message (new win) |
| 12/11/03 | re: Finance for Development # |
Sidharth Shankar
|
Hi,
The answer to this crisis in development financing can not come from multilateral institutions alone. Multilateral institutions like IMF and World Bank have only a fraction of the international capital. The vast majority of the capital lies with individual nations. However, if this alone was the case then things should not have been so difficult. The problem is that the capital in most of the poor countries is inactive or dormant. It is true that countries like Mexico might not have enough US dollars to pay for everything. But then there are other resources too that need to be unlocked. For example, the land resource. Governments are the biggest land lords in any country whether rich or poor. And the lands owned by the govts are prime lands. Why can't the govts in these countries sell off these lands and generate resources. In a country like India there are huge volumes of Gold with the people. India is the biggest consumer of Gold in the world and not from today but for a sufficiently long period of time. So, why can't govt. of India take steps to unlock this vast reserve of Gold. There can be innovative ways of development financing like encouraging the people to donate labour for works of national importance like dams, roads, schools etc. It is true that in countries like Pakistan, govts do not have enough resources to feed their starving masses and it is also true that most people in the villages might not be having enough cash. But, they have something else like the food grains, if the govts can set up a machinery to collect donations of food grains from farmers ( not much say 25o gms per farmer per day) and then ensure that it is used properly then the problem of malnourishment would vanish in no time.
There is no sense in just abusing the developed world, even though it is true that England of today was financed by the loot that the british carried out in India for centuries, even though it is true that France has its history stained with the blood of the African plunder that it carried out. This is not going to solve the problem. The issue can be tackled only if we start looking at possible sources of alternative financing, preferably domestic financing.
I would love to have people react to my ideas.
Regards,
Sidharth
> Peter Burgess wrote:
> A couple of years back the UN organized a conference on Finance for Development in Monterrey in Mexico. The idea was to come up with more and better financing for "development", more money and new sources.
>
>But, in fact, really nothing very much happened. There is a continuing decline in financing for development, and now probably less financing for development now than a decade ago or even two or three decades ago. And, of course, what there is has tremendous "conditionality"
>
>The World Bank, IMF, regional development banks, the UN and the bilateral agencies do not seem to be able to plan for development progress. There is a global development crisis around failed public finance and essentially a failed banking and financial services sector.
>
>I have consulted in development economics for approaching 30 years and have seen too much the results of failed development. But I know there are a multitude of unfunded important development and business opportunities. Very few of them are ever identified and documented for potential investors or supporters. What money there is keeps going into works that destroy economic value rather than creating local wealth. A formula for certain development failure.
>
>As I see it, ICT can now be used so that opportunities for "development investment" can be widely communicated and resources mobilized. Better, ICT can also be used so that there is universal excellence in accounting and accountability.
>
>What I am describing seems so obvious. So what are the catches? Certainly, there are many. But none are insurmountable.
>
>I will not make this any longer. But I am very curious to find out if there is any interest in this issue in this part of the Ryze network
>
>Sincerely
>Peter Burgess
>PS ... The GentleJava coffee is part of our own business development. This is a great product and we are helping producer countries (coffee growers) to make profit out of the US market ... and this helps fund priority needs in farming communities. Seems like a win-win and a socially responsible investment direction. Post Reply Reply by Private Message (new win) |
| 12/04/03 | re: Finance for Development # |
Kelly Lefkowitz
 |
As to interest in Development Projects, I am ambivalent. As to how the value is calculated for a project, my experience with economic development is such that the metrics tend to be uni-directional. Most common measures are numbers of new jobs formed, velocity of money measures, etc.
Borrowing from a technique for valuing intangibles in corporations, one could probably get better results if intangibles such as reduced health care expenses, decreases in mortality, reduced dependence on charity, self-sufficiency, and perhaps even an index of hope.
If intangible measures are incorporated into project success, perhaps more funding would be available.
Kelly
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| 12/04/03 | Asset Allocation: Few issues # |
Kelly Lefkowitz
|
On one side, asset allocation makes sense when sectors are ranked based on the probability of one investment sector outperforming t-bills then indexed for volatility. The problem arises when you use the seat of thee pants to the fourth decimal place formula to ascribe levels of volatility to each sector.
The other view is that the investments should be picked on their individual merits. List the best investments in order and pick the top ones to complete a portfolio. This method is problematic when you have to decide how much to put in any of the top 10-20 investments. Shouldn't you bet the farm on number one?
When I started investing my own money over 20 years ago, risk was in order. Today, I have enough risk in my daily business life. I keep the portfolio conservative. This is also a form of asset allocation.
Kelly LefkowitzPost Reply Reply by Private Message (new win) |
| 12/04/03 | re: Asset Allocation: Few issues # |
Prashant Gandhi
|
A simple answer - Religiously following an asset allocation over a 20 year period is never sensible. That sorted, let me try and answer the question on RTA.
This may seem totally irrelevant to the question posed - but for a software that we wrote for a bank once allowed them to assess the risk appetite of their high networth clients periodically allowing them to redefine their investment goals.
20 year period is a long horizon and the risk appetite is directly proportional to the lifestyle of the individual, which may change over a period of time. Hence, it is fair to re-evaluate periodically and change the asset allocation accordingly.
regards,
Prashant
Post Reply Reply by Private Message (new win) |
| 11/30/03 | Finance for Development # |
Peter Burgess
|
A couple of years back the UN organized a conference on Finance for Development in Monterrey in Mexico. The idea was to come up with more and better financing for "development", more money and new sources.
But, in fact, really nothing very much happened. There is a continuing decline in financing for development, and now probably less financing for development now than a decade ago or even two or three decades ago. And, of course, what there is has tremendous "conditionality"
The World Bank, IMF, regional development banks, the UN and the bilateral agencies do not seem to be able to plan for development progress. There is a global development crisis around failed public finance and essentially a failed banking and financial services sector.
I have consulted in development economics for approaching 30 years and have seen too much the results of failed development. But I know there are a multitude of unfunded important development and business opportunities. Very few of them are ever identified and documented for potential investors or supporters. What money there is keeps going into works that destroy economic value rather than creating local wealth. A formula for certain development failure.
As I see it, ICT can now be used so that opportunities for "development investment" can be widely communicated and resources mobilized. Better, ICT can also be used so that there is universal excellence in accounting and accountability.
What I am describing seems so obvious. So what are the catches? Certainly, there are many. But none are insurmountable.
I will not make this any longer. But I am very curious to find out if there is any interest in this issue in this part of the Ryze network
Sincerely
Peter Burgess
PS ... The GentleJava coffee is part of our own business development. This is a great product and we are helping producer countries (coffee growers) to make profit out of the US market ... and this helps fund priority needs in farming communities. Seems like a win-win and a socially responsible investment direction. Post Reply Reply by Private Message (new win) |
| 11/26/03 | Asset Allocation: Few issues # |
Sanjeev Gopalakrishnan
 |
The modern portfolio theory based asset allocation uses a Risk Tolerance Analysis (RTA) questionnaire to determine the appropriate asset allocation for a particular investor.
Suppose the investor is found to be aggressive and hence an aggressive portfolio loaded heavily is recommended to him. Let the time frame may be 20 years.
There are certain issues here:
Should the investor religiously follow the asset allocation through out the investment horizon? If so will he be able to reach the goal as the probability of losing heavily in any year will be high for an aggressive portfolio? This means that he may lose up even 50% of the value of the portfolio in the penultimate year.
If the investor need to change asset allocation as per changes in the market conditions then does he need to take new RTA every time?
Is it possible to have a dynamic asset allocation which starts from aggressive and slowly changes every year and reachs very conservative when the time frame narrows down?
If so what are the things to be considered here? Will this strategy give a high probability of success?
If anybody could throw some light on these issues it would be helpful.
Regards
Sanjeev
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| 11/25/03 | for technical analyst folks: investor's business daily articles on yahoo, plus 2 more links # |
Adrian Scott
 |
I hadn't noticed that IBD has articles up on Yahoo, including some of their technical analysis tutorial articles (a.k.a. sell ibd's other products articles j/k).
http://biz.yahoo.com/ibd/
other technical analysis oriented sites i like are
clearstation
http://www.clearstation.com/
and prophet finance
http://www.prophetfinance.com/
i finally did some charts over the weekend for the first time in a while...
enjoy!
-aPost Reply Reply by Private Message (new win) |
| 11/20/03 | re: Gold # |
Toucalit Benton
|
Regarding your question on investing in gold...this is what I did although I believe it to be strictly speculative. I bought a large quantity of Bema Gold (BGO), Coeur D'Alene (CDE) and Rydex Juno (RYJUX).
I got BGO because I know for a fact that this is the gold bug's favorite small cap stock to buy. For some strange reason BGO has peaked after the most recent major top in the price of gold back in 1996. The top in BGO was a couple of months after the peak in the XAU index (gold stock index) as well. Theoretically, even if right now is the peak in the price of gold, BGO still has some room to move higher.
I bought CDE because my previous research has shown that silver lags far behind in the price of gold. Not only that, as Richard Russell has mentioned that there is a large gap between the price of gold and the price of silver. Back in the mid 70's when gold was selling for around $200/oz. silver was selling for $2/oz. At the peak in 1980 the price of gold went as high as $800/oz while silver went as high as $50/oz. That's a 400% increase for gold and a 2500% increase for silver.
Some people would say that the only reason that silver went so high is because of the Hunt brothers cornering of the silver market. My opinion is that without the cornering of the silver market the price would have gone to $25/oz. Silver is the poor man's gold and just like the low-priced tech stocks with no earnings and a pipe dream, the price was low enough to get some action late in the game.
Gold and silver rise due to various factors including but not limited to, extreme levels of debt in the financial system, too much paper money in the financial system, too high of a foreign debt, too high of a Federal deficit and unstable geopolitical environment. All of these factors are present at the same time which is very, very rare. There is not telling how some or all of these issues will be resolved, however a small position in gold/silver couldn't hurt.
My purchase of the Rydex Juno fund actually is a play on the attempt by vested interests to stop the inevitable increase in the rise in gold and silver. Usually the best tool for stopping the rise in gold and silver is higher interest rates. The Rydex Juno fund becomes profitable when interest rates rise.
Remember, all that I have mentioned is a small part of my otherwise conservative blue chip stock portfolio (long term portfolio). The gold, silver and interest rate investments (short term portfolio) are strictly for speculative purposes. Historically there has been a positive correlation between large declines in the Dow and gold stock. Clearly it is necessary to be very careful not to speculate more than you willing to lose.
Sources:
David Marantette
http://www.gold-eagle.com/editorials_01/marantette070701.html
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