Three gentlemens were all brought to the same emergency room and all of them died before they arrived. Just as one of the nurses was about to put the toe tag on the American, he stirred and opened his eyes. The doctors and nurses Astonished and asked him what happened.
"Well," said the American, "I remember the crash, and then there was a beautiful light, and then the Canadian and the Scot and I were standing at the gates of heaven. St. Peter approached us and said that we were all to young to die. So, with the donation of $50, we could return to earth. So of course I pulled out my wallet and gave him the $50, and the next thing I knew I was back here."
"That's amazing!" said one of the doctors, "But what happened to the other two?"
"Last I saw them," replied the American, "the Scot was haggling over the price and the Canadian was waiting for the government to pay his."
Sunday, December 30, 2007
Tuesday, December 18, 2007
Growth Investing vs Value Investing
Before getting any deeper on stock investing, you must realize that there are styles of stock investing - growth investing and value investing.
Value Investing
Value investing is the strategy of selecting stocks that trade for less than what they are really worth. Value investors keep looking for stocks that are under priced but have excellent financial record. This information can be obtained by looking at the financial statements (balance sheet, income statement). Value investors typically take into consideration attributes like low price to earnings ratio (P/E), price to book ratio (P/B), price to sales ratio (P/S) and high dividend yields. In short, value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow).
Growth Investing
Growth investing works exactly opposite to that of value investing. Growth investors focus on stocks with faster growth potential. Growth investing is the strategy of selecting stocks that show signs of faster growth. Growth investors keep looking for stocks that will grow faster compared to its industry or the overall market. Growth investors focus on stocks trading at high P/E, P/B and P/S ratio and do not care much about dividend yields. In short, growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields).
Value versus Growth
Value investors generally plan to hold the stock for a longer duration, since they believe over a period the stock will come out with flying colors. Value investors are generally patient investors. Warren Buffet is well known for value investing. On the other hand, growth investors believe that soon the company will grow rapidly and so will its stock price. Growth investors are generally in for short time frame compared to value investors. George Soros is well known for growth investing. In general, value stocks tend to hold up better during stock market downturns.
Value Investing
Value investing is the strategy of selecting stocks that trade for less than what they are really worth. Value investors keep looking for stocks that are under priced but have excellent financial record. This information can be obtained by looking at the financial statements (balance sheet, income statement). Value investors typically take into consideration attributes like low price to earnings ratio (P/E), price to book ratio (P/B), price to sales ratio (P/S) and high dividend yields. In short, value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow).
Growth Investing
Growth investing works exactly opposite to that of value investing. Growth investors focus on stocks with faster growth potential. Growth investing is the strategy of selecting stocks that show signs of faster growth. Growth investors keep looking for stocks that will grow faster compared to its industry or the overall market. Growth investors focus on stocks trading at high P/E, P/B and P/S ratio and do not care much about dividend yields. In short, growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields).
Value versus Growth
Value investors generally plan to hold the stock for a longer duration, since they believe over a period the stock will come out with flying colors. Value investors are generally patient investors. Warren Buffet is well known for value investing. On the other hand, growth investors believe that soon the company will grow rapidly and so will its stock price. Growth investors are generally in for short time frame compared to value investors. George Soros is well known for growth investing. In general, value stocks tend to hold up better during stock market downturns.
Sunday, December 9, 2007
A guide to achieve whatever you want in life
THERE WAS ONCE A MAN WHO WAS LOST. He came across an old man and asked him for directions. The old man asked him if he knew where he currently was. He replied that he did not know. The old man asked him again if he knew where he wanted to go. The lost man again replied that he did not know. The old man said, "If you don't know where you currently are and if you don't know where you want to go, it does not really matter which direction you take. 'Anywhere' will do because you will never get 'anywhere', whichever way you take."
To achieve what we want in life for example financial success and happiness, it is essential that we know where we are now and where we want to go. If our career is going nowhere, the results we have been wishing for never happens or the opportunities we hope for never seem to come knocking, chances are we don't have clear, defined goals.
Goal-setting is not just dreaming or wishing. Dreaming and wishing are fine. They are expressions of desires so many of us have. But to achieve what we want in life, we need a sense of purpose. We need to set goals. "It is impossible to advance properly in life without goals.
Here is a four-step guidelines to achieving what we want in life:
1. Self Evaluation: To Know Where Are We Now?
2. Goals Setting: To Know Where Do We Want To Go?
3. Planning: To Know How Do We Get There?
4. Action: Do It Now!
There are 2 more activities that can help us to move faster towards achieving our goals. It's like putting a 'turbocharger' in our vehicle as we journey to success.
Below are the 2 activities that speeding up our journey:
5. To Know Why We Want That Goal
6. Visualise Our Achievement
Life is a game with few players and many spectators. Those who watch are the hordes who wander through life with no dreams, no goals and no plans even for tomorrow. Do not pity them. They made their choice when they made no choice."
To achieve what we want in life for example financial success and happiness, it is essential that we know where we are now and where we want to go. If our career is going nowhere, the results we have been wishing for never happens or the opportunities we hope for never seem to come knocking, chances are we don't have clear, defined goals.
Goal-setting is not just dreaming or wishing. Dreaming and wishing are fine. They are expressions of desires so many of us have. But to achieve what we want in life, we need a sense of purpose. We need to set goals. "It is impossible to advance properly in life without goals.
Here is a four-step guidelines to achieving what we want in life:
1. Self Evaluation: To Know Where Are We Now?
2. Goals Setting: To Know Where Do We Want To Go?
3. Planning: To Know How Do We Get There?
4. Action: Do It Now!
There are 2 more activities that can help us to move faster towards achieving our goals. It's like putting a 'turbocharger' in our vehicle as we journey to success.
Below are the 2 activities that speeding up our journey:
5. To Know Why We Want That Goal
6. Visualise Our Achievement
Life is a game with few players and many spectators. Those who watch are the hordes who wander through life with no dreams, no goals and no plans even for tomorrow. Do not pity them. They made their choice when they made no choice."
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