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Fundamental-analysis

How I work in Forex: Nzd-Usd analysisIn this article, I show you my way of working in Forex, starting with the choice of the currency pair, passing through all aspects of the operation (position size, maximum loss, etc.), until the analysis of the currency pair and the strategy to be adopted (entry-level, stop-loss and target). Looking at the table of currency pairs I follow, the one that caught my eye was Usd-Nzd. The price is at a level that is not sustainable in the long run for the New Zealand economy. In the last few years, the area 0.72300/0.72800 has been a very important level for Nzd-Usd and above that, the currency pair would be in an area of excess price (actually, already above 0.70000 Nzd-Usd is in an area of excess price). The operation that I am going to open has an optical of the medium-long period, if you are not in a position to hold open the position also for several months, do not replicate it. Let us proceed. The first thing I decide in each of my operations is how much I am willing to lose. My maximum loss is not equal for all the operations, with some more "particular" I have a smaller propensity to the risk. An example is precisely this operation. Although Nzd-Usd belongs to the currency pairs so-called "Majors," the New Zealand dollar is very similar to an "Exotic" currency, therefore with less volume and consequently more volatile and easily speculate. And besides, I already have other long positions on USD. For these reasons, I have decided that my maximum loss on the whole operation is $ 500, and based on the stop-loss, I will decide the position size to open. I now analyse Nzd-Usd trying to understand how it might move in the coming weeks and establish the type of trade and the entry-level. Above, you can see the daily chart with the Nzd-Usd sensitive levels highlighted. New Zealand had less impact from the covid-19 pandemic and this allowed its economy to be less affected. This led to a strong rise in its currency to the 0.75000 area against the US dollar. New Zealand, however, has a strongly export-based economy and a currency so strong, as mentioned earlier, is not sustainable in the long run. The New Zealand dollar also strengthened as many expected the central bank to intervene with a rate hike, "the Committee agreed that the risks to the economic outlook remain balanced, conditional on ongoing stimulatory fiscal and monetary policies. The Committee agreed that, in line with its least regrets framework, it would not remove monetary stimulus until it had confidence that it is sustainably achieving the consumer price inflation and employment objectives. Given that uncertainty remains elevated, gaining this confidence is expected to take considerable time and patience." However, this is currently unlikely, at least in the short term. Also because in recent months the New Zealand economy has slowed down, "Economic activity in New Zealand slowed over the summer months following the earlier rebound in domestic activity. December quarter GDP was weaker than expected and more recent indicators suggest that momentum has reduced. Some members noted that supply chain disruptions could potentially constrain domestic activity in the near term. In addition, business credit growth and investment remain subdued." As for the US, the focus in recent weeks has been on inflation following the entry into force of Biden's economic stimulus plan, "with inflation running persistently below this longer-run goal (2%), the Committee will aim to achieve inflation moderately above 2 per cent for some time so that inflation averages 2 per cent over time and longer‑term inflation expectations remain well-anchored at 2 per cent." In the March "Summary of Economic Projections," the PCE inflation forecast for 2021 rose to 2.4% from 1.8% in December, and the Core PCE inflation forecast rose to 2.1% from 1.8% in December. Inflation is forecast at 2.0% in 2022 and 2.1% in 2022 for both. In the same document, you can see (you can find it on the Federal Reserve's website) that in March compared to December the GDP forecast was raised (to 6.5% in 2021 from 4.2% in December) and the unemployment rate lowered (to 4.5% in 2021 from 5.0% in December). Macroeconomic analysis shows what has already emerged above with New Zealand's data deteriorating in recent months while US data is improving almost steadily. If the vaccination continues apace, the US economy will recover quickly, as the UK economy is doing in Europe. Once the analysis is complete, how do I intend to proceed? I do not want to open the operation at once. The moment is particular and I would not be surprised to see Nzd-Usd go up even 300 pips. So, I decided to open a spy order at 0.72400 to see how the currency pair will react to that level. I will place the primary order, which is larger in size as it is closer to the stop-loss, at 0.73700. For both orders, spy order and primary order, I destine the same maximum loss, which I had decided to be $ 500, so my maximum loss for the two types of orders is $ 250 each. Now with the Value-at-Risk, I calculate the stop-loss and with the stop-loss, I calculate the size of the two orders. To be precise, I use CVaR to calculate the stop-loss (it is all explained in my book on fundamental analysis in forex) and the calculation gives me a stop-loss at 0.75200. I now calculate the two position sizes. Ultimately, I will open a short position of $ 9,000 at 0.72400 (spy order) and a short position of $ 17,000 at 0.73700 (primary order), with a stop-loss at 0.75200. As for the target, I always like to see how the currency pair moves to assess where to take profit. This, somewhat summarised, is how I work in Forex, how I analyse a currency pair and how I organise the whole operation.
Education
by TradingwDavid
2
Market Cycle of an Emotional Roller CoasterWhen things are great, we feel that nothing can stop us. And when things go bad, we look to take drastic action. Because emotions can be such a threat to an investor's financial health, it is important to be aware of them. This awareness can then protect you from the negative consequences of impulsive and irrational reactions to these emotions. 1: Optimism, thrill and euphoria Investors all start with optimism. We commonly expect things to go our way, or we tend to expect a return for the risk of investing. As expectations are met, it is common to get excited about the possibility of even greater returns and the excitement becomes thrilling as the returns exceed expectations. At the top of the cycle is when investors experience euphoria. But it is here where investors are at the point of maximum financial risk. When we believe everything we touch turns to gold , we fool ourselves into believing we can beat the market, we cannot make mistakes, that excessive returns are commonplace and that we can tolerate higher levels of risk. 2: Complacency, denial, hope The second phase of the cycle occurs when the market stops meeting our new lofty expectations and begins to turn. At first, we anxiously watch the market for any signs of direction. Anxiety turns to denial and then quickly to fear, as the value of the investments decline. Many people will then start to act defensively and may think about switching out of riskier assets to more defensive shares or other asset classes such as bonds. 3: Panic, capitulation, despondency In the third phase of the cycle, the realities of a bear market come to the fore and an investor may become desperate. Many panic and withdraw from the market altogether – afraid of further losses. Those who persevere become despondent and wonder whether the markets are ever going to recover and whether they should be there at all. Ironically, at these times, an investor will commonly fail to recognize they are actually at the point of maximum financial opportunity. 4: Skepticism, caution, worry In the fourth stage of the cycle, investors may experience some skepticism when markets start to rise. They often have a sense of caution or worry, wondering if market growth will last.—and may be reluctant to invest money in the market at a point when prices are still relatively low and opportunities are attractive. What are the consequences of this emotional roller-coaster?
BITSTAMP:BTCUSDEducation
by Kolin-Lukas
What is Ethereum? The Queen of the crytpocurrenciesI called Ethereum as the Queen of the cryptocurrencies, Blockchain and Technology. Yes, because Ethereum it's become one of the best crypto-proyect favorites and enthusiastic of the world programmable blockchain technology. And I'm so enthusiastic with Ethereum. But, What is Ethereum? 1. Ethereum is a global, open-source for decentralized applications. 2. Ethereum it's the 2nd biggest cryptocurrency after of Bitcoin, and their adoption was extraordinary in 2017 when Ethereum apply the unique solutions for the Blockchain technology 3. Using Ethereum you can write that controls digital value, runs exactly as programmed, and is accessible anywhere in the world. 3. Ethereum was built on Bitcoin innovation on 2015, with some big difference that apply Vitalik Buterin (Co-founder o Ethereum ) to make an Ethereum like the world's programmable blockchain. What define Ethereum for us? 1. Banking for everyone: Not everyone has access to financial services. All value that you have its saving your products, marketplace to lending, borrowing and more into this Blockchain. 2. It's a more private internet: Ethereum infrastructure created an economy based on value. 3. It's a peer-to-peer network: This allows that you can to move your money, or make agreement directly with someone else. 4. Censorhip-resistant: No government or company has control over your Ethereum assets. 5. Commerce Guarantees: Ethereum created a more level playing field. 6. Compotibility for the win: The batter products and experiences are being built all the time because Ethereum products are so compatible by default. What makes Ethereum dapps unique? 1. You can to create new kinds of money, digital assets, DEFIS, stablecoins, decentralized applications and much more 2. Web apps that are unstoppable and uncensorable. 3. Build decentralized organizations, property, or virtual worlds that are governed collectively. 4. The Ethereum community includes tens of thousands o developers, technologists, users, Hodlers, and Ethereum enthusiasts all over the world. About Ethereum 2.0: It's a long-planned upgrade to the Ethereum network that as result Ethereum became more scalable and secure for all world strenghtening its power to becoming a cryptocurrency like money of the future and the world proggramable in all live facet that we know. Ethereum 2.0 will reduce energy consumption, this allow that the network make the proccess more transactions then before by seconds and increase the network security. Ethereum will introduce a protocol proof of stake blockchain and shard chains. Proof of Stake is the process of commiting your Ethereum to become a validator in the Ethereum network. A validator runs software that confirms transactions to create new blocks in the chain. For that reason, Ethereum want to develop this protocol that all holder, just you will need 32 ETH to become a Ethereum staker to join and be part one of Ethereum staker to secure the network and support the economy of this big crytpocurrency. The sharchains it's like parallel blockchain that within Ether and take on a portion of the network's proccesing work. They'll become turning an Ethereum super high way of interconnected blockchains. This is a huge change to how Etherem works and it should bring equally huge benefits. Actually, Ethereum use the protocol proof of work like Bitcoin , but wan's to introduce proof of stake to still the network more strenghten and secure with big changes in this cryptocurrency. Why Ethereum 2.0 change the crypto-industry and become a cryptocurrency leader of the decentralized technology? 1. Since launching on 2015, Vitalik has grew the adoption to use a system have created millions and millions of dollars o value and enabled entirely new kinds of software applications. 2. Ethereum still needs to scale to fulfill its potential for the world most-used a programmable blockhchain. 3. It's hard to scale a blockchain in a secure and decentralized way. My Personal Opinion: That cryptocurrency it's one of my favorite about the adoption and how we can to created a proyects, DEFIS, tokens, website, and more, and included an ICOS proyects and more to solution problems out on the world. Also, that cryptocurrency I use to trade in my trading day-to-day and I believe a lot in this proyect that Ethereum wan't to build an adoption to all value pass to the blockchain value that give life in this ecosystem. Also, I'm interesing to one day to learn more about Ethereum developers, did you know. One of my favorite proyect it's build a blockchain world based in the economy digital. Ethereum could be a good solution for me because Ethereum it's like money of the future, and the world programmation leader to be in the world top of leader of the technologies, and included in the Top Fintech technology in the world. Also, I show this charts about what I expect for Ethereum . Look how Ethereum could give us the same Bitcoin movement on 2017!!! But without conclusion, Ethereum in the next adoption and bull rally, I am so visionary of this project that Ethereum as it's one of the leader crytpocurrencies and blockchain technology, the infrastructure on this project is so strongly and I see that Ethereum has all component to resolve our life facets that it's out without resolve. But about of my project, I'm in the process to take my ideas and review how I want to created it. But more later, I want to talk about it when in the future. As Ethereum it's the 2nd biggest cryptocurrencies after of Bitcoin, the next bull rally of Ethereum it's so similar when Bitcoin were around of $20,000 dollars, but now, it's very imprescindible that Ethereum reach this price level. Ethereum it's another crytpcourrency that faces with another big rival called Cardano, Cardano it's in the top #3 and this cryptocurrency it's could to become a new Queen of crytpcourrency taking the place of Ethereum as the 2nd cryptocurrency. Now, Ethereum it's in the top #3 below of Bitcoin and Ethereum. But, Ethereum and Cardano are so similar projects with strong objectives and goals. And also, Ethereum it's my favorite trading par to trade, and it's one of my best cryptocurrency that pay me my earns in Ethereum making trading. For that, once challenge that Cardano faces it's the Ethereum 2.0, that worry me if could Cardao beat Ethereum, but yes, Cardano have all chances to beat Ethereum and take the 2nd place, and maybe Ethereum in the 3rd place. If you like this educationa content, I invite you to share this fundamental analysis with others people, Ethereum enthusiastic and more to expand my value content and grow up my community. I have over 1,000 followers! and 4,100 points in my Trading View Reputation/b] I invite you to check below my others ideas that I publish in the past if you're interesting.
COINBASE:ETHUSDEducation
by harisonhbn9718
3
Guide to Fundamental Analysis in Crypto WorldLet's consider a very important topic of fundamental analysis for cryptocurrencies. If we talk about traditional markets the fundamental analysis takes into account the company's financial statement and macroeconomic climate, but in case of cryptocurrencies this information is unavailable because the lack of the publicity. As a result the technical analysis role in crypto world is more significant, but applying the FA you can significantly improve your trading results. Here is 7 areas which should be analyzed to apply complex approach. 1. ROADMAP AND WHITEPAPER. This point is most significant for the altcoins. The most reliable projects have a very serious development plan, every step should be explained in details in the roadmap and whitepaper. If it's not everything good with it, the project could be just scam. 2. MARKET CAPITALISATION. It is simple the coin quantity multiplied by the current market price of one coin. It is widely known that the lower market cap associated with the higher potential price growth. 3. VOLUME. If the coin has a low volume traded the huge manipulations could take a place in the market. The coin should be represented in the largest cryptocurrency exchanges it increases the probability that the corresponding project is not a scam. 4. COIN SUPPLY. Here we should know about if the coin supply restricted or not. If it is restricted the increasing demand pushes the prices higher. 5. FOUNDERS. The projects with a great potential is driven by founders and developers which have already realized some successful projects. In the opposite case it is probably scam. 6. DOMINANCE. On TradingView you can find the market dominance of BTC, USDT, ETH and Altcoins. This is the demonstration of the capital flow between different cryptocurrencies. For example if the BTC dominance decreased and Altcoin dominance increased the Altcoin's prices are not so significantly affected by the Bitcoin price changes. 7. NEWS. This is the most important part of FA, especially for the large cryptocurrencies. Thus the positive news push the price higher, while negative one entail dumps.
Education
by Skyrexio
2
Strategy on how to trade Lockheed MartinHey guys! Hope this analysis finds you having an incredible week, and ready for an even better weekend! Please kindly like this chart if you found this content helpful! Ok let's dive in! Lockheed Martin is still officially in a bear market. It is still 30% away from its all time high, with the technicals on the weekly indicating very tough days ahead for LMT holders. Tale of two stories here when it comes to very good fundamentals but very poor technical indicators. Ratio Time • P/E 14.64 (Very attractive) • Forward P/E 13.08 ( Boeing Forward P/E is 156.29 !!) • P/ FCF 27.57 • Debt/Eq 2.56 (Normally I would say this is really high in a different sector, but money is cheap right now and these guys are in a field that requires massive capital output...this is why if I see a level this high in a utility provider I am ok, but if I see a level this high in a financial or tech I run!) • EPS 23.4 • EPS this Y +25.8% • Sales Q/Q +8.7% • ROE +171% (again justifies that debt/equity level as they use debt very...prudently) • ROI +47% • Gross Margin 13.3% • Net Margin 10.2% (Stunning) ..especially when we see the rise in price recently in Boeing . Boeing has a 2.9% GM and a -7% Net Margin guys. Yes BA are losing money with a forward P/E of 156?? Holder Metrics • Insiders Own 0.08% • Insider Transactions over past 3 M (0.00) • Institutions Own 77.9% • Institution 3 Month Transactions -0.42% So what do we do when the technicals say run and the fundamentals say buy? We listen to both! The strategy I like to take ahead a potential trade when I see two conflicting tales are either run. Or wait for the technical indicators to display signs of a potential bottoming pattern. Next Chart will display pivot points . Finding a position at a lower price heading into the mean with good underlying fundamentals is a much better approach, although it takes patience and time as I think the idea of playing a short off the TA or a long strictly off the FA would be... short sighted. Best tactic is to embrace both and wait. Pivot points below! Friend please share with me & the wonderful TradingView community how you think we should trade Lockheed Martin! If you have a LMT chart yourself please be especially sure to share it with me!
NYSE:LMTEducation
by ZenMode
Value investing toolkitHello Investors! This educational post is about my toolkit developed for filtering out the almost perfect applicants for further analysis and research in the light of the principals of value investing. The work is based upon Warren Buffett's principals, calculations and recomendations. After publishing my two previous posts on the "Value investing chart set" and the "Intrinsic value calculation" I have received a lots of positive comments and feedbacks. Alongside the encouraging comments I have received quite a lots of requests to share the chart layout and the other scripts I am using while compiling the chart set I have introduced. I have promised to further develope both tools and come up with an even more powerfull toolkit. Now it is here! :-) I have combined the already published Intrinsic value calculation script with the Value investing chart set and further developed both on the way! This setup now is way more powerfull and exciting and is loaded with features as described below. First of all: here is the public link to the shared chart layout setup: www.tradingview.com Which company could be more adequate for the introduction of a value investing toolkit than Berkshire Hathaway, the company of Warren Buffett? It is not just an honor to use this ticker for educational purposes but aparently -as you can see during the analysis- it makes a perfect long term investment! What a surprise, right? :-) Here I will only explain all the new features of this chart as there is a very detailed explanation of both the Intrinsic value calculation script and the Value investing chart set in those two posts. You can find the links for them below. SO! Obviously the biggest developement is poping into your eyes right away: I have programed a value investing analysis tool into the chart so whenever you enter a ticker, the toolkit will supply you with an instant assesment on the given ticker. Of course it is a very basic tool and can only supply you with a preliminary overview on the company and does not, in any way substitute detailed and troughly research before you make any investment decission! - The assessment is based on the principals Warren Buffett, Ben Graham layed down. Some of Peter Lynch's work has been used, too. - The tool is using a rather conservative approach as the main goal is to maintain the capital invested and only additional to that to produce adequate gain on the long run In general: if you see a green labell with the text 'Possible subject for firther research' than you have found a company which passed a conservative test and is worth for further study. Needless to say that if you see a red label with the text 'XX NOT RECOMENDED XX' and a bunch of reasons below, why (overvalued - overpriced - debt risk) do not rush to your broker to put your life savings on it. To give you an example, here is how Google is evaluated today: In order to get the green light a company has to meet the following, rather strict criterias: - Valuation: The current price of the stock has to be below the Intrinsic value. (In this case $224 closing price vs. $426 for the Int. value) This line will precisely tell you how far the price is from the Intrinsic value, in other words, it will tell you your margin of safety when investing to the company on today's price level. In this example it is 90% - Pricing: The close price has to be below the "Buffetts limit price" indicator. To make it short Graham and Buffet stated that the number you get when multiplying the Price to Earnings (P/E) ratio with the Price to book (P/B) ratio has to be below 22.5 in order to consider the given share cheap. This line will tell you how far the price is from the Buffetts limit price. This case it is 61%. ($224 vs. $361) - Debt risk: The company has to have much less debt than equity in order to qualify for long term value investing. The limit here is 1, meaning that the company has to have more equity than total debt. If this is not the case, the company fails the test. (This can be taken a little flexible as certain industries, like banking and insuarance by definition deploy a lots of debt instruments without risking their long term profitability or sustainability) In the example of Bershire this is 0,27 meaning that Berkshire has more than 3 times more equity than debt which is needless to say a more than perfect setup. (What do we expect from Mr. B, right?) These are the first 3 deciding criterias where a company can fail the test. Any of those turn to be out of range, you will get a red labell with a big fat NO recomendation. And most of the time this is going to be the case... As for the other points you will get more inside peek into the state of the company: - Price/book: this line will tell you if the price is still below the 1.5 times book value point. This is the highest price what value investors find comfortable paying. If the P/E value is very low for the share you might run into a situation where the Buffetts limit (P/E times P/B) is still low (below 22,5) but the stock is rather overpriced. You will not get a red labell here, only a 'Caution' warning and a grey label, instead of 'GOOD!' - Earnings: you will get an opinnion on the earnings here. The main criteria to get a 'GOOD!' evaluation is to have a growing level of EPS in the last 5 years. - Revenue: It is very important to invest in a company which is able to grow it's revenues steadily. This line will analyse that and will tell you if it wouldn't be so. - Profit & loss: Although it is not a deciding factor but a value investor should avoid investing to companies that were producing losses in the past decade or so. This line examines the last 5 years in this respect. - Dividend: The one and only point where Berkshire fails the test! :-) As Warren Buffett used to say: I am not paying income tax, Berkshire doesn't pay dividend... :-) Poor guy! Since we are investing for a very long term it is imperative that we top the gains we might have over the years with the 3-4% dividend p.a. As you can see here, there is a Warning! comment should the company fail in paying dividend. - Number of shares: Here you will see a quick analysis on the share buyback habits of the company/management. Again, what we examine here is wether the number of shares outstanding is less than 5 years ago or more which means that the company is buying back it's shares thus help investors to maintain equity. So entering your choosen ticker you should have an instant overview if the company can supply you with the value investing criterias or fails in this field. One very instructive exercise is to click through the leading blue chip stocks with this valuation toolkit and see how hugely overvalued they are at the moment. Some further developements I made in the mean time: - I have automated the calculation of the book value growth with finding the very first data point regardless when it happens. In this way you do not have to enter any parameter and you can simply click conveniently from one ticker to the other without reentering the needed inputs. Hopefully it doesn't matter which pricing structure you are in at TradingView. Free acounts will use 5 years data. - I have included a 4th pane just below the main pane. This shows the revenue of the company in 3 way: the white line is the anual values, the grey line is the quarterly data and I have also added the red line showing the TTM (trailing twelve month) figure in order to visualise the very recent trends in the revenue of the company. - The same way I have added the TTM figure on the lowest pane to the EPS figure, for the same reasons. - I have added explanatory labells to the right of the charts showing the actual value of the indicators, like the Intrinsic value, Buffetts limit, and book value. - Should either the Book value or the EPS figure be negative for the current year the script will issue a red label without any data regardless the other values as the Buffetts limit can not be calculated. (Negative numbers does not have square roots and that is required to calculate the limit price back from the P/E and the P/B values) One final remark: this toolkit is as complete as my knowledge is about value investing. It is a purely educational tool, not in any way intented to be investment advice. I do use this tool and for instance I do have position in this example company Bershire Hathaway at the time of writing this post. You have to make your own research and decision when it comes to investing your money. For further explanation on the Intrinsic value calculation please check my earlier post here: For further explanation on the Value investing chart set please check my earlier post here:
NYSE:BRK.BEducation
by PeterNagy
108
Value investing chart setI would like to share the set of charts I use to find and analyse candidates for value investing. It is a rather dense and telling setup where you can find a lots of information. Please allow me to explain them one by one. (The chart is made on the company Nippon Tel. It is not a recomendation for anybody to buy Nippon Tel, I use this chart for educational purposes only) So: what can you see in this chart? A LOT! You can, in a glance asses if a company would qualify for value investing or should be avoided. From bottom up here are the panes, charts, indicators explained: There are 3 panes in this setup. In the lowest pane you will find the dividend information. There are 3 indicators telling a lot about the company's endurance and discipline. We can see that in our example - the company has never been missing a dividend payment over the last 15 years (even during the 08 crisis) - the company has been constantly raising the dividends over the last 15 years - the company has made an ever growing diluted EPS (earnings per share) over the last 15 years - the investment in the current price levels would yield 3,69% (bottom right scale) - the company has been very disciplined to pay out about 50% of the earnings per share and retain the rest within the company resulting growing book value In the middle pane you can see the net income (green territory) of the company and the number of common shares outstanding (blue line). We can see that in our example - the company has been constantly making profit over the last 15 years (even during the 08 crisis) - the company constanly buying its shares back thus helping the existing shareholders to keep/grow the equity per share Now the top, main pane tells the most about the company and its share. Here is what you can read from this chart: - the yellow line will show the Debt to Equity ratio What this is telling you is that the company is ran by vigiliant leaders who are keeping a close eye on the company's long and short therm debt and resist the temptation of today's really cheap loans. As Peter Lynch use to say: it is almost impossible to go bankrupt for a company without excessive debt. The ratio Ben Graham and Warren Buffet (also Peter Lynch) finds healthy here is a 1 to 2 debt to equity ratio. In other words, it is assuring if half of the equity covers all the debt of the company. In the case of our example the current value of this ratio is 0,415 which is a very good level of debt. (Industry specific figure!) The company has been constantly paying it's debt back over the last 15 years and although the figure has been growing during the last 2 years it is still under a acceptable level. - the light brown line is the book value or the shareholder1s equity per share Needless to say the for a value investor it is imperative that the book value is steadily growing, just like in our example from 8,8 to 21. What is even more important is that the current price is below the book value per share or in other words a buyer in these price levels gets a 1 on 1 value for his bucks. Just to give you a comparison: today this value for Apple (AAPL) is 30 to 1! So you pay $ 30 for $ 1 of equity when you buy Apple stock. In our example the book value of this company is steadily growing and the price is currently below the book value. - the pink line on the pane is my "invention" as this is the intrinsic value graph which is calculated by the script I have posted already here. I would not explain in details here, please check out my post and all the comments below it for details. This line shows you what would be a fair value of the stock if you take all the dividends and the book value growth that will happen in the next coming 10 years and discount it back to today's value using the 10 years US Note's yield. This is called the intrinsic value of the company and calculating it is rather art than science, says Buffett. In the case of the example company the Intrinsic Value is around 43 while the price is a bit above 20 which means that a value investor has a 100% margin of safety when buying this stock. - the green/red line is another calculated line: Warren's limit price Ben Graham and Warren Buffett uses a rule of thumb saying that the PE (price earning ratio) multiplied by the Price to Book ratio can not result a higher value than 22.5 to be considered a cheap stock. Here I use the Diluted Earnings figure to calculate the PE ratio to take all the convertible securities (options, prefered stocks, warrants, etc) into consideration. This line shows if the stock can be valued as cheap or overpriced. In the case of our example the current price is under the limit price and can be considered an underpriced stock. As you can see there are lots of fundamental informations you can visualise and asses with this chart setup in order to pick your winning stocks for value investing.
FWB:NTTEducation
by PeterNagy
30
How To Pick The Right Choice For Long-Term Hold??What is the Fundamental Index (FCAS)? FCAS stands for Fundamental Crypto Asset Score. This score comes from examining the basics of a project's business cycle and shows the fundamentals of a digital currency. The principles that are considered for scoring are: User Activity , Developer Behavior and Market Maturity . FCAS ratings are numbers between 0 and 1000. The number 0 is the worst and the number 1000 represents the highest performance of a digital currency. Now let's talk about each parameters of scoring in details: User Activity: User Activity is a comprehensive measure of the behavior of all consumers in a particular project that includes two main factors: Using the project Network activity The advantage of this principle comes from examining all the activities of a particular blockchain, analyzing solutions if necessary (such as ERC-20 smart contracts), and tagging wallet addresses to identify exchanges, projects, contracts, users, and other types of participants. Various statistical and exploratory models are used to tag all active addresses. Network Activity is a comparable estimate based on the above classifications that focuses on the activities of wallets, stakers, miners, users, and investors. The Project Utilization parameter is calculated based on the activity of the wallets run by users (most of which are smart contract transfers and calls). This activity is used in the predefined application of the project. User activity has a great impact on the FCAS score of the project. Developer Behavior: Developer Behavior Behavior is an indicator that shows the level of activity and efficiency of the developers of a project and comes from three factors: Code changes Code improvements Project participation The score of this section is obtained by recording and evaluating source code events in services such as GitHub. There is a slight difference between the obvious criteria of the developer and the activity of the community, so in addition to the commits and pushes sections, other things are examined to get a deeper evaluation of the project. Accordingly, 30 different variables are examined, then generalized to the three factors mentioned above, from which the overall score of developer behavior is obtained. Developer behavior has a major impact on a project's FCAS rating. Market Maturity: Market maturity, which is obtained from the two factors of risk and money supply, indicates the degree of accuracy of a digital currency in the market. The more rational the market reactions to different scenarios and risk factors (factors such as liquidity, price plans, constant algorithmic forecasting and etc...), the higher the probability. Also in this principle, an analysis of the fixed money supply is performed in each of the projects. The more volatile the money supply and the more it is controlled by a small number of addresses, the lower the money supply points. Market maturity has little effect on a project's FCAS rating.
Education
by ArshiaZojaji
2
Educational material nr.8In this article I will tell you about another metrics, which can be usefull at analysis of the company. Based on GuruFocus metrics. Another metrics from Financial Strenghs metrics: Piotrowski F-score — used for understanding of the financial strengh of the company. Scores from 0 to 9. 1 score means, that company have one of the characteristics (positive net income, positive ROA, positive Operating Cash Flow, CFO is bigger then net income and other). 9 is the higher rank and means, that company is strong. Altman Z-score — measure of results of testing company on bankruptsy risk. Higher — means that company is safe. Beneish M-score — Metric of earning manipulation of the company. If it has negative score — that means, that company does not manipulate of the earnings. It can be analysed with comparison of PE and PE without NRI and PE with Cash Flow. WACC vs. ROIC — Weighted Average Cost of Capital vs Return On Invested Capital. If ROIC > WACC, that means that investing in this company is effective and profitable, because capital generate profit, which is bigger then cost of capital. Metrics from Profitability Rank 3-Year Revenue Growth Rate — average revenue growth rate per 3 years. Usual auxilar metric. 3-Year EBITDA Growth Rate — same average meaning of EBITDA per 3 years. 3-Year EPS without NRI Growth Rate - EPS without NRI per 3 years. This 3-years average metrics are not so important then metrics per 5-10 years, because they have big influence of not-so-far-news/acts of firm. From Dividend and buyback metrics: Dividend Yield % - financial ratio, show relation dividends to stock price. Higher — means good, but it depends from company’s situation. For example 0 means, that firm does not pay dividends, but makes re-investments, what have positive influence on company. Dividend payout ratio — dividends, which payed related to the company net income. Forward Dividend Yield % - Usually don’t used, from reason of future non-guaranted company work. But it can be usefull for understanding expectation of the market. 5-Year Dividend-on-Cost % - Rarely used, but can be useful in some situations. Dividend divided by price of purchasing of the stock. They are used from situation in analysing of the company. Because they can add some points to see full situation if main metrics and indicators with financial statement analythis can’t give review of the firm.
NASDAQ:EXELEducation
by ValueInvest_Pro
Technical Analysis OverviewThe investment decision is based out of two different ways: Fundamental Analysis: Analyzing a company's financial statement Technical Analysis: Understanding the market sentiment behind price trends Technical Analysis The study of statistical trends, collected from historical price and volume data, to identify opportunities for trade. Assumptions of technical analysis Market discounts everything History tends to repeat itself (psychological) Price moves in trend (reflexive) Trend A trend is the overall direction of a market or an asset's price identified by trendlines. Three possible trends: Uptrend: Asset going up, making higher highs or higher lows Downtrend: Asset going down, making lower highs or lower lows Sideways: Asset trades in horizontal channel Technical Analysis considers: (Basics of Technical Analysis) Price Chart Patterns Volume-Momentum Indicator Oscillators Moving Average Support Resistance levels Movements are not linear, the price will face resistance as it goes up or support as it goes down. -‍Resistance: Level where an uptrend can be expected to pause or rebound due to a concentration of sellers. -Support: Level where a downtrend can be expected to pause or rebound due to a concentration of buyers. Technical Indicators broadly serve three functions to alert, to confirm, and to predict. There are two types of indicators: Leading Indicator: Leads the pice, generates a signal for trading opportunities. Eg. Oscillators i.e. RSI, CCI, Stochastic, Williams %R, Momentum, etc. Lagging Indicator: Follows trends and patterns, reduces the risk in exchange for missing early opportunities. Eg. Moving Averages, Bollinger Band, and MACD. A few myths about Technical Analysis: TA is only for short trading or day trading- TA can be used in all time frames, from 1 minute monthly charts TA has a low success rate- Solely TA can give you profits if used effectively Technical Analysis is quick and easy- Continued success requires in-depth learning, practice, good money management, and discipline Ready-made technical analysis software can be helpful- Such software may provide insights about trends or patterns but cannot guarantee profits, use of backtesting is necessary TA can provide price predictions accurately- TA is about probability and likelihood, and not guaranteed thereby price ranges can be predicted The winning rate in TA should be higher- Profitability does not depend solely on win-rate, it also incorporates risk-reward ratio Limitations of Technical Anlaysis Tend to give mixed signals when used in isolation, confusing traders TA is all about probability and signal cannot guarantee a successful trade even after thorough analysis Often technical analysts use indicators in different methods and may form a biased view regarding the same stock Many a time the technical signal may lag, and by the time proper signal is generated it is possible that the trade might be over A single trading strategy may not work in all scenarios as markets tend to be extremely dynamic Few Trading Mistakes Beginners Make: Starting with real money The best way to get acquainted with trading rules is to have a demo with virtual money before investing in real money, you can perform paper trades on Mudrex Not examining situation by yourself Make your own strategy, test them on the Mudrex platform, and then follow the same plan to trade by understanding things on your own Inevitable Losses Set risk limits for yourself and trade accordingly and accept the losses you face Margin Trading in the beginning It is not recommended to margin trade until and unless you understand the risk completely as crypto trading is rewarding yet risky Following the herd Before making a start with real money, make a set of rules which needs to be followed and have stop losses to limit the loss incurred on your trade ---------------------------------------------------------------------------------------- If you find the post useful, please like and share our ideas with the community! - Mudrex
COINBASE:BTCUSDEducation
by Mudrex
19
Educational materials nr. 7This article is about Balance Sheet metrics. They are including metrics, which show proportions and structure of the company. Structure of the company include own capital, assets and loans. It can tell also about financial stability of the company too. Equity-to-Asset — relation equities to assets. Show using own resources in producing of the products. Cash-To-Debt — relation cash to debt. If more — that is better. If this indicator is higher then 1, that means, that company can pay her debts more then 1 time. Indicate financial strengh of the company. Debt-to-EBITDA — relation debt to operational income. Helping metric. Debt-to-Equity — relation debt to own capital. Critical meaning — 0,4. This meaning can depend from sector of the company and current expectations and situation of the company. Interest Coverage — relation operating income to interest payments. Indicates financial strengh. If higher — that is better. All of them are important in the complex analysis of the company and her financial stability. If company has good operational results, but not good financial stability and dangerous structure with high ammount of debts, she will not be good candidate for investing.
NYSE:FHIEducation
by ValueInvest_Pro
EURUSD: Long Term Perspective & Trend Analysis hey guys, I know that many of you are expecting a coming bearish movement on a daily on EURUSD. analyzing a weekly time frame though, I want to warn you that the pair has still much space for a bullish continuation. on a weekly, the price is clearly trading in a global bearish trend. spring's covid bullish rally made the market set a higher low and triggered a bullish rally, and it looks like a long term goal for buyers is 1.21 - 1.25 wide supply cluster. this zone is based on 2008'th, 2010'th, 2012'th lows and 2018'th high. in my view, a strong weekly bearish movement will most likely start from that area. however, what makes me extremely cautious is the recent higher low. usually, it is the first strong signal of a coming trend change. if the above-mentioned zone is broken buy buyers, It will signify a long term bearish trend violation and start of a new long term bullish trend. as always we can only speculate about the probabilities of both events. but clearly decision point is close.
Education
by VasilyTrader
10
Fundamental vs Tecnical Aanysis 8.22.20 In this video I am suggesting a free service that might be useful to some traders. My trading is technically based, however, I believe there is value to fundamentals... and I explained this in the video. I think the video is worth listening to... and I describe these relationships using the DXY, Gold, Bitcoin... as it pertains to the fundamental analysis offered by this free service. In your pursuit of a successful trading strategy, at some point part of you will try to eliminate any information that seems superfluous, confusing, or causing loss. It is understandable why many technical traders will eliminate the fundamental component. I am trying to argue the need for balance and the process to take in more information in a way that doesn't create more stress if it is done judiciously. Whether you like it or not successful trading isn't just technical... and not just that, having a broader understanding of markets, even if you choose to be a technical trader( which I am )... will more likely enhance your results with a realistic perspective on your part.
BITSTAMP:BTCUSDEducation
by ScottBogatin
Educational Materials nr.5 Net Margin is bigger than Operating Hello dear investors, This article is about rare situation, when net margin is bigger then operating margin. Such situation need to be analyzed well to understanding potential of the company. This happen from external or internal reasons: 1. When company can’t pay taxes and/or have tax benefits. Company will not pay taxes untill she will get net profit as tax benefit. Profit from tax benefit can be holded or payed as dividends. It have good influence on stock growning. In some countries this situation can be because of low or zero taxation. 2. Net profit can be from non-operating activity. It is income from investing activity of the company, selling assets, currency course changing and so on. Company can make her status better in a financial statement. It will seems from big difference between P/E and P/E without NRI. That is mean, that company have most income not from operating activity and is bad signal for investors. Analysis on a BIO case. Net margine is bigger then operating in 8 times. Company has difference between P/E and Price-to-Free-Cash-Flow in 8 times. It means, that declared income does not supported by real result. P/E equality to the P/E without NRI means, that company have income just from operating activity. In this case reason of bigger meaning net margin from operating margin is in taxation. Company does not have cash to pay taxes, so she had tax benefits. She wrote this tax benefits in net income. Cases, when net margin is bigger then operating are rare and need serious research and analysis to understand profitability from investing in this company. Wish you have good investing and big profits, Financial analist and adviser, Valerii Selin
NYSE:BIOEducation
by ValueInvest_Pro
Educational materials nr. 4Hello, dear community. This article is about metrics, which show real finance situation of the company. They are based on Cash Flow Statement. Metrics, based on Income Statement can be unreal, but based on Cash Flow Statement are hard to forge. Describing of them: CFI – Cash Flow from Investing. Calculate with buying-selling securities, emission of bonds and dividend payments. CFF – Cash Flow from Financing. Calculate with buying-selling of company assets. CFO – Cash Flow from Operations. Is the most important in analyzing of financial situation. Calculate with sells, inventory costs, interest payments, taxes and cost of goods sold (COGS). FCF – Free Cash Flow. Is sum of CFI, CFF, CFO. P/FCF – relation price of the stock to FCF on stock. Is metric of overvaluation/undervaluation of the company. Is important near, close meanings of P/E to P/FCF. That is mean, that real activity of company has no difference or little difference from declared results. Price-to-Owner-Earnings – Relation price of the stock to owner earning on stock. Show real activity of the company, unlike P/E. Owner earnings – Profit of the owners of the company. Owner earnings = net profit + depreciation & amortization +/- another non-cash costs – average annual maintenance capital expenses. But even Cash Flow statement do not secure from manipulations. For understanding real situation needs: 1. Exclude tax benefits related to employee stock options. 2. Exclude anomaly big changes in currents assets. For example, it is big changing of accounts receivables, inventories, accounts payable. All this changes tell, that company try to manipulate data to make better presentation of financial results. 3. Minus costs, which needs to support operational activity (taken from CFI). Pros metrics, based on Cash Flow Statement: + Show real situation of the company business + Hard to forge – any changes are seen Cons metrics, based on Cash Flow Statement: - Needs checking and re-calculations This indexes give a possibility to check veracity of financial results. And they complement analysis from Income Statement and Balance Sheet metrics. Wish you have good investments, Financial advisor and analyst, Valerii Selin
AEducation
by ValueInvest_Pro
Educational materials nr. 3Hello everyone, who are interested in value investing. This article is about metrics, based on Income Statement data. They are used for first-look analysis to understanding is this company good for investing. This metrics show over/undervaluation of company. Undervalued companies are good to investing. Description of indicators: PE – relation of stock price to net profit on stock. Indicate over/undervaluation of the company. Her critical meaning depends from sector of economic, in which works company. PE without NRI – relation of stock price to net profit on stock, but do not include unusual profits from non-operational activity (selling part of assets, real estate and so on). If PE without NRI is equal PE – company have profits only from operational activity and is good signal. Forward PE – consolidated meaning future PE from analytics. PB – relation price of stock to the book value of stock. Measure of over/undervaluation of the company. If PB = 1, it is mean, that company have fair value. Usually PB is more than 1 and become 1 or lower only in crisis. PS – relation price of stock to sales/revenue. EV-to-EBIT, EV-to-EBITDA, EV-to-Revenue – another variant of metrics under/overvaluation of the company. Can be used instead PE or with PE. Revenue – Or sales. EBITDA – Income after paying COGS (Cost of goods saled), SG&A (selling, general and administrative expences) and before payment of D&A (depreciation and amortization), taxes and interest rates. EBIT = net profit – EBITDA after payment D&A, taxes and interest rates. Enterprise value (EV) – price of company at absorption by other company. EV = Market Capitalization + Debt + Preferred Shares – Total Cash Market capitalization = shares at market*price of share PEG – relation price of stock to earnings growth on share for 5 years. Indicates market waiting. If PEG > 1, it is mean, that company is overvalued by market and/or analysts. If PEG<1, that mean, that company is undervalued by market and/or analysts. Uses as auxiliary metric. Pros of this metrics: + They give “photography” of company on the stock market + Give a possibility to make comparative analysis with other companies. Cons of this metrics: - Don’t give a valuation of financial health of the company - Don’t give a valuation of structure of the company This negative sites decides by using other metrics. Indicators, based on the Income Statement, are important part of analysis of the company and give understanding of her status at analysis moment and needs of next analysis. But using this metrics needs to use that with other elements of quality and quantitative analysis. Wish You have good investing, Financial analyst and advisor, Valerii Selin
AEducation
by ValueInvest_Pro
Educational materials nr.2 Hello dear community, wish you have good day. As it was in educational materials number 1, for analysis of company actively use metrics. They include calculation financial data from financial statement. This calculation uses to compare with other companies in sector and to compare with history of company. Metrics are part of complex analysis. Sources of metrics can be taken from Morning Star, GuruFocus and other. Bad meanings of metrics do not mean, that company is bad. On metrics have influence external factors and all financial data are based on a last published statement. That is why this indexes are analyzed with financial statements of the company. For example, big debts can be general characteristic of sector. We can make classification metrics as: 1) Based on income statement. Used to understanding overvalue/undervalue of company at moment. 2) Based on Cash Flow statement. Indicator of financial health of the firm. 3) Based on Balance sheet. Useful when you need to understand structure of the equity, assets and debts – indicate money-management of the company. Exist many other metrics, but they are used in special methods of analysis of company. Pros: 1. Easy to use and interpretation; 2. Some objectivity in analyzing of company; 3. Easy-to-understand calculations; Cons: 1. Exist risk of manipulation of financial data in financial statement. Some guarantee exist, when company have an audit; 2. Need to check financial statement; 3. Do not give all-include analysis, needs research of environment and sector of the company; Metrics are good in analysis of the company: easy-to-use, objective, possibility to understand situation on market and comparing with competitors. But they must be complete with qualitative analysis. This is comparing with competitors, analysis of market and research of financial statement. Wish You have big profits and good investment, Financial analyst and advisor - Valerii Selin
NASDAQ:DOXEducation
by ValueInvest_Pro
Educational materials nr.1Good day, dear community. Today I will tell you about value investing. Value Investing is investing, based on economical indexes of the company and her real (fair) value. Real value is a guarantee of stable growing of the company. This kind of investing is not for speculations. It was created for long term investment. Decision about investing is after quantity and quality analysis. For quantity analysis use special indexes with own evaluation criteria (price to earnings , cash to debt and other). Quality analysis include fundamental analysis . It is analysis of economics, industry and sector. Often use comparative analysis with competitors and environment. Important part is analysis and checking financial statements of the company. The most famous value investors are Peter Lynch, Benjamin Graham, Warren Buffet. All of them had success using own variants of value investing. Pros: 1. Big profitable; 2. It needs less time on investing; 3. Long term; 4. Less influence of speculations. Cons: 1. Can be big losses in crisis (more than 50%); 2. Need more resources, than usual trading; 3. Influence of news and fundamental factors; 4. Need better investing preparations. Wish You profits and good investing, Financial advisor and analyst – Valerii Selin
NASDAQ:DOXEducation
by ValueInvest_Pro