One of the first companies I bought shares in bought was Centrica. If you’ve ever paid for gas in your home then you’ve probably heard of them. A huge, FTSE250 company with decades of trading history and operating in what is usually considered the ‘defensive’ market of utilities. When I bought the shares, I loved […]
Earlier this week I was alerted to a story about everyone’s favourite electric car company Tesla and their ‘interesting’ approach to the on-going financial black hole that represents their balance sheet. Despite declared a loss every quarter since they were founded in 2008 (yes, that’s right, ten years ago), this is a stock that has
The house of cards that is the Tesla balance sheet Read More »
I was watching a video of the 1996 Berkshire Hathaway shareholder meeting where a member of the audience asked Warren Buffet where Berkshire kept their cash. If you watch the clip you might get some amusement from Warren casually stating “we have a billion and something in treasuries, and a little something extra in commercial
The appetite for extremely risky assets has grown and grown since the financial crisis of 2008. More debt and margin. It seems like noone is thinking about risk – just reward. Every since the first debt was issued, there have been individual and institutions that we all know shouldn’t be lent money under any circumstances.
Corporate bonds, or financial obligations owed by companies, have been increasingly year on year for a long time now. A few months ago, a fellow investor pointed out to me the growing issue not just of net bond values in issue, but the grade of those bonds. How are bonds graded? Bonds – both corporate
On the 30th January, the Financial Conduct Authority published two papers as part of a process to propose new measures on encouraging effective corporate stewardship for investors. As an investor myself, I was pleased to read that the FCA is trying to encourage asset managers to more closely monitor the companies they invest in and
Having previously written about the serious danger presented to UK investors by the crisis of credibility facing the UK’s audit industry, I’m yet to see any serious measures taken to suggest this beyond an attempt to drive ‘competition’ in the industry. Why are authorities not undertaking a wholesale review of the effectiveness of auditing? Late
More competition won’t change the culture of auditing Read More »
Anyone that follows this blog will also likely have seen my profiles on Linkedin, Facebook or Twitter. Although I wouldn’t call myself a prolific user of social media, I engage with it fairly regularly, in addition to my work on this blog. The longer I’ve been on the platforms, the more connections I’ve made. Most,
The various news feeds and sources of financial commentary I follow are becoming increasingly vocal about the rising risk of global debt. Starting in early 2018, commentators have been warning that global debt levels are spiraling out of control, possibly leading to a repeat of the 2007/8 financial crisis. Global debt levels are at historic
I must confess to being absolutely fascinated by the on-going saga of General Electric. Originally founded in 1892 by Thomas Edison, the company employs more than 300,000 people and is structured as a conglomerate, with about 12 divisions including GE Aviation, GE Power and GE Capital. It holds diverse interests including healthcare, transportation and lighted
Earlier this week I was speaking to a friend about his portfolio and some options he was considering taking to reduce volatility. Put simply, he wanted to sell out of a number of positions which were rapidly declining, move into cash and then buy in again at a lower level. When I asked him why,
Reader Question: How often do you sell positions? Read More »
If you consider yourself an investor then no doubt you’ve heard the story of ‘Mr Market’ – the emotionally unstable, totally illogical neighbour that comes to your house and offers to buy your shares or sell you new ones at a different price every day. Some days, he offers a high price and other days
Anyone with an ear tuned to global financial markets will know that central banks around the world are winding up their decade-long programme of quantitative easing. Although originally designed to support banks suffering a credit crunch following the 2008 financial crisis, these have ballooned and extended over the last ten years and with interest rates
In a recent article, I made a reference to the price of Amazon shares reaching a ridiculous 150 forecast earnings. The price of a company is an indicator of the market’s confidence in its abilities to generate cash and return this to shareholders. The higher the P/E ratio is, the more confident that investors generally
Have tech valuations lost all semblance of reality? Read More »
Having covered a number of company fundamentals that demonstrate how a company is operating (Turnover, Profitability and Leverage), this article will examine the Balance Sheet, which provides an overview of a company’s assets and liabilities, as well as the shareholders’ equity at a given point in time. Each of these sections includes many sub-accounts which
Understanding Company Fundamentals – Balance Sheet Read More »
