The Price Earnings (P/E) Ratio is a well known and easily computed number regarding the value of a company. Yet, it's really not that well understood. What exactly does a P/E of 14 indicate? Is it better, or worse than a P/E of 16?
The way I see it, there are two main components that make up the P/E ratio, and they are not price and earnings - well, they are - but, if you slice it another way then you get two more revealing components.
The delusion...Value Investing
- Why it's the best long term investing strategy. Why most investors don't have what it takes. Why and how individual investors can outperform most fund managers, and why some fund managers are worth reviewing
Other stuff
- What is money, where did it come from, and where is it going? Some tax effective investment structures. The Australian Property Bubble. How investing, insurance, gambling, betting are all the same thing..
Quality Company Metrics
The first step in my investing strategy is to identify quality companies. There are approximately 2000 companies listed on the ASX, and I only want to invest in the top handful - and even then - only when they are cheap. But back to step 1, I'd like to walk you through how I identified the few companies at the top of the list.
I started by downloading all of the relevant company financial data from Comsec. Note that this was not the price history for the companies, but each company's financial reporting history.
I started by downloading all of the relevant company financial data from Comsec. Note that this was not the price history for the companies, but each company's financial reporting history.
Inflation
I've been thinking about inflation a lot lately. Some time ago, I realised that I had no understanding of what inflation was all about, and I was somewhat embarrassed by this knowledge gap. Since then, I've tried to build a model of understanding for inflation, and it goes something like this...
Subsequent Rates of Return
The concept of initial rate of return (IRR) is fairly straight forward and easy to understand. Related, but not so straight forward, to the initial rate of return, is the subsequent rates of return (no particular acronym) that apply in the periods following the initial rate of return.
The Evil Princes of Martin Place
I've (finally) just finished reading The Evil Princes of Martin Place by Chris Leithner. It took me quite a while to finish, primarily because I haven't had that much time to read lately, but also because it's not an easy book to skim - I really had to concentrate.
Overview of The Evil Princes of Martin Place
In the book, Leithner presents a history of banking and money, analyzes the causes of depressions and recessions, describes the failings of the banking system, including the central banks and governments that support them, and comes up with some fixes for the problems that he sees.
Some specific conclusions that Leithner reaches in the book are:
Overview of The Evil Princes of Martin Place
In the book, Leithner presents a history of banking and money, analyzes the causes of depressions and recessions, describes the failings of the banking system, including the central banks and governments that support them, and comes up with some fixes for the problems that he sees.
Some specific conclusions that Leithner reaches in the book are:
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