Tag: Investment

All investment related articles are found here. Educative, informative and written clearly.

Builders FirstSource Inc. Is Good Long-Term Investment

Builders FirstSource Inc is a good long-term investment with the possibility to produce almost 30% of revenue

By Guy Avtalyon

Builders FirstSource Inc BLDR stock is, according to analysts, rated as a buy. In November it was upgraded from a hold rating.

This third-quarter earnings season, many companies reported better earnings per share and beat the experts’ estimations and expectations. There were a lot of outperformed stocks and investors are interested to add them in their portfolios because they want strong returns. But which one or few to choose? The market noise is enormous and it so hard for individual investors to make such a decision.

Builders FirstSource (BLDR) is currently recommended as a buy. This stock is trading with a P/E ratio of 12.74. Meaning, at current prices, you have to pay $12.74 for every $1 in trailing yearly profits. Over the past 52 weeks, BLDR’s P/E ratio has been as high 25.65 and low 10.15. But value investors use the P/S ratio as a metric also. You can find the P/S ratio when divide the stock price by sales.

On the last day of October Builders FirstSource issued its Q3 earnings report.

Builders FirstSource’s quarterly earnings were $0.72 per share, meaning it beat experts’ expectations. The earnings per share were $0,67 for the same quarter last year.

So, we can easily see earnings of 20%. Surprised? For the previous quarter, it was supposed that this company would report earnings of $0.48 per share. But it delivered earnings of $0.63, showing an increase of 31.25%. For the last 12 months or 4 quarters, Builders FirstSource has exceeded consensus EPS estimates 4 times.

The company posted revenues of $1.98 billion for the third quarter. This compares to year-ago revenues of $2.12 billion. The company has beaten consensus revenue estimates two times for the last four quarters.

“Our strong third-quarter growth in sales volume and margins combined with our focus on working capital management generated another quarter of strong cash flow. We were also pleased to deploy capital on an accretive acquisition, while at the same time, further improving our ratio of net financial debt to Adjusted EBITDA to 2.5 times,” said CFO Peter Jackson.

BLDR stock is currently trading at $25,36.

What’s next for the Builders FirstSource stock?

The tricky question indeed. The price made a slight decline of 0,02% yesterday. You can use one simple measure: the company’s earnings outlook. You have to examine the current earnings expectations given by the experts but most importantly you have to check how their predictions have changed.

The stock is bullish and Traders-Paradise opinion is the price can go up from $25.50 to $27 over the next 12 months. So, we can say it is profitable to invest in Builders FirstSource stock since the long-term earning potential is about 7.00% in the same period.

The company’s ABOUT

The company is a supplier and manufacturer of building materials, components, and construction services.

Builders FirstSource provides an integrated solution to its customers offering manufacturing, supply, and installation of building products such as windows, doors, and millwork lines.

Its products are the factory-built roof and floor trusses, wall panels and stairs, vinyl windows, millwork and trim, and engineered wood designed, cut, and constructed. It constructs interior and exterior doors.

The company is headquartered in Dallas, Texas.

Should you buy the Builders FirstSource stock?

Traders-Paradise predicts a future increase in values of Builders FirstSource, Inc (BLDR) stock. If you want to hold stock with good return, Builders FirstSource, Inc might be a good option for you. Builders FirstSource, Inc quote is $25.36 at 2019/11/20. Based on previous performances this stock may be worth up to $32 with revenue of almost 28% after a five years period. If you invest $10.000 today in this company, after 5 years, it is possible to have about $12.800.

21st November 2019
Shefa Gems Mining Company Stock

Shefa Gems is an Israeli company, a miner concentrated on precious stones.

By Guy Avtalyon

Shefa Gems projects are taken in Northern Israel. It is the explorer of globally recognized Carmeltazite. It is from Israel and listed on the London Stock Exchange.

Market Cap £8.6mln
Price: 5 GBX

Updated: October 29, 2019

Shefa Gems Ltd (LON:SEFA) Death of Director Abraham Ben Leah (Avi)
Shefa Gems announced that Avi Taub, Chief Executive Officer of the Company, has passed away following a short illness.
Vered Toledo, Chief Operating Officer said: “We all stayed with Avi vision and we have a mission to fulfill now – open the first alluvial gems mine in the Kishon Mid Reach northern Israel – I’m sure that with the help of God we will do it all for Abraham Ben Leah blessed memory.”
Our condolences to his family and the Shafa team.

Is Shefa Gems publicly listed

Shefa Gems is listed on the London Stock Exchange (LSE) under the ticker: SEFA

In the USA trading in the Shefa Gems Shares is available via brokers such as Fidelity or Charles Schwab

Shefa Gems Ltd (LON: SEFA) is an Israel-based exploration mining company with its operations orientated to the north of the country.

About Shefa Gems Ltd.

Shefa Gems, formerly known as Shefa Yamim, is essentially a precious stone miner. It discovered rubies, sapphires, Carmel sapphires, and diamonds.
Shefa Gems’ focus is on exploration targets that it believes to have the highest upside and can be taken into production at an almost low cost. The company offers its services in Israel where founded in 1999.

Shefa Gems is a pioneer in precious stones exploration in Israel.

We found on its official website: “The first and only company in Israel focusing exclusively in mining exploration of precious stones in the North of the holy land.”
Shefa Gems Ltd (LON: SEFA) has delivered the highest grade results to date from Zone 2 of its Kishon Mid-Reach project in Northern Israel.
Shefa Gems (LSE: SEFA) is currently moving towards trial mining and revenue generation at its Kishon Mid-Reach project in the Mount Carmel region of Northern Israel. Besides regulatory and operational works to reach the result, the company is developing an intelligent marketing strategy. They are creating a jewelry collection in cooperation with the internationally acclaimed designers.

The company is a multi-commodity explorer and the Kishon Mid-Reach is its primary asset. It a 4.5km-long and 150m-wide ground. The company has separated this field into three zones. Every zone is at different stages of exploration and development. Currently, most of the work is in Zone 1

Shefa Gems finished an independent technical-economic evaluation on Zone 1 in February 2019 and found that the first mine should be able to process 1.5Mts of gravel over 11 years. This capacity can probably be doubled, showed the result of the evaluation, by halving unit operating costs to $10.15/t.

The Possibilities

The company owns two prospectings and one exploration permit in northern Israel, covering a total area of 614 square kilometers. The main exploration spots are the primary volcanic sources on Mount Carmel and the secondary sources of valley-filled sediment deposits everywhere the Kishon River.

At Mount Carmel, the company has permission for 4 sources: Rakefet Magmatic Complex, Muhraka, Har Alon, and Beit Oren.

To date, most of the exploration work has been carried out on the Rakefet Magmatic Complex. The geological mapping and rock and soil sampling are completed. The gems and industrial minerals are found.

At Kishon, the main exploration target is the Kishon Mid-Reach. There is the company’s most high-level exploration project and open-ended exploration activities are being initiated to determine a SAMREC compliant Mineral Resource.

In October this year, the company performed its highest degree results to date from Zone 2 of its Kishon Mid-Reach project in Northern Israel. A sample yielding resulted in a mineral collection grade of 467 carats per 100 tonnes.

The company renewed its license for Zone 1 in August this year for added 12 months.

Shefa Yamim, today Shefa Gems Ltd. is listed on the London Stock Exchange in December 2017 after a placing and subscription at 110p per ordinary share. The company’s initial market capitalization was approximately £15.3mln. The company was 75% in the ownership of the subsidiary of Shefa Yamim Ltd, listed on the Tel Aviv Stock Exchange. After the London entry, the shareholding of Shefa Yamim Ltd has reduced to 48.9%. Traders-Paradise’s opinion is that investing this stock can have potential in the future.

20th October 2019
Invest in Saudi Arabia

The Saudi Arabian economy, one of the strongest and most stable in the region, and has started a phase of transition. That is a great opportunity for investors.

By Guy Avtalyon

Invest in Saudi Arabia can be profitable but it is connected with some drawbacks. Saudi Arabia is the biggest economy in the Middle East. Its economy is growing, but at a more moderate rate than earlier, for example, during the oil growth at the beginning of this decade. Saudi Arabia’s government is spending about 7% to US$295 billion this year to encourage economic growth.

The economy is still supported by rich oil reserves, but oil prices are at the lowest in the past decade.

The Saudi government has endorsed a national plan called ‘Vision 2030’. This plan aims to modernize and diversify the economy. They have entrusted a huge quantity of assets to the Public Investment Fund (PIF). The goal is to increase employment, especially in the private sector, in retail, healthcare, and education.

Foreign investments are welcome too. To encourage them, the government opened the Saudi Arabian Stock Exchange, named Tadawul.

Tadawul

Tadawul is the only securities exchange in Saudi Arabia with about 150 listed companies and itis controlled by the Capital Market Authority. The exchange is weighted towards the financial services and energy industries but covers many other industries.

The Tadawul All Share Index (TASI), is very similar to the S&P 500.

The foreign investment rules are now more liberal than ever. The most important, listings and capital raises in Saudi Arabia were strong over the earlier year, while capital markets in other regional and oil-driven economies have dried up.

Saudi Arabia can be a very attractive investment target when oil prices are rising. At the same time, it is the trickiest part. The country is depending on crude oil and it is a limited source. Despite the government’s efforts, the diversification in other industries may not show the sustained result. We will see. But there are other benefits of investing in Saudi Arabia.

Relying on oil has some crucial benefits. Oil revenues are directed to the economic development programs managed by the government funds. Further, the government has already taken steps to privatize some industries, for example, telecom and electricity. Actually, they want to open up their market to fresh investment from foreign investors and especially in non-energy markets.

Where to invest in Saudi Arabia

Saudi Arabia has currently over 500 domestic funds in operation. That is the largest number of funds in the Middle East by a large margin. You can invest in asset classes such as listed equities, money market instruments, and corporate and sovereign debt. Also, private funds invest in real estate. That is the main asset for high net worth and institutional Saudi investors. Nowadays, there is an increase in private equity and venture capital due to the support of the CMA, SMEA, and other government authorities and various stimulus programs.

Saudi Arabia adopted seven Guiding Principles for Investment Policymaking in 2019. It includes among others, non- discrimination, investment protection, investment sustainability, transparency, protection of public policy concerns. And foreign investors are there.

For example, Aubin Group from the UK invested $743 million, DuPont, and Alphabet.

The stock of foreign direct investment rose last year and reached $230 billion. Foreign investments are essentially located in the chemical industry, tourism, fuel, automobiles, etc.

The case of Saudi Aramco

With a net income, last year of $111.1 billion, Saudi Aramco, the kingdom’s oil company, and the world’s most profitable company is not listed in Tadawul.

And the criteria for listing on the Tadawul aren’t as rigorous as some other exchanges like the London Stock Exchange or the New York Stock Exchange, for example.

“What we have always said is that Aramco is ready for listing whenever the shareholders make a decision to list,” Aramco President and CEO Amin Nasser told recently to reporters at the World Energy Conference in Abu Dhabi.

“The primary listing is to list locally but we are ready also for listing outside in other districts,” Nasser added.

Why invest in Saudi Arabia

If you want to invest in Saudi Arabia you should know some things. Saudi Arabia is ranked as 5th in the world for fiscal freedom. Also, it is the 3rd most rewarding tax system in the world. This country is among the 20 biggest economies and the biggest in the Middle East. It is one of the world’s fastest-growing countries and the largest free market in the Middle East. Also, Saudi Arabia is the biggest recipient of Foreign Direct Investment (FDI) among the Arab countries. The downside of investing in Saudi Arabia can be limited resources. But you can find plenty of companies to invest in. For example, it is recommended buying these stocks: THOB AL ASEEL CO., or ABDULLAH SAAD MOHAMMED ABO MOATI FOR BOOKSTORES CO., or BAAZEEM TRADING CO. Check them.

But stay tuned, there will be more about Saudi Arabia companies good to invest in.

18th October 2019
How Often to Check The Investments?

2 min read

by Guy Avtalyon

Your investments should certainly be periodically checked but not every day. Even though it is your money invested. You have a bigger chance to lose money if you check your investments every single day.

How?

Well, you know that the price changes occur very frequently due to the stock market volatility. The stock price can rise and drops hourly. Watching that, you may feel a bit more nervous about your investments and provoke you to sell instead to hold and wait for the price to increase. Also, you have to know that daily fluctuation in stock prices does not influence your investments. The most important is how your stocks perform in a bigger time frame.

If you check your investment too frequently, you will end up acting irrationally to market movements and sell your stock at a low price.

Yes, I know, our investments may give us the impression that we will never end up with sufficient money. You have to know how often to check your investments so that you don’t destroy them.

For new investors, quick gains can cause investing to look impressive. It is normal to check your investment every night. I can understand that. I know some investors are checking several times a day. If you need to be worried about your investment it is a sign you made the wrong choice.

If your portfolio loses just a bit in a few days or weeks there is no reason to panic. The statistic shows that fresh investors usually put money in mutual funds or ETFs because they are afraid to invest in more volatile stocks and they avoid them. The truth is that holding stocks requires more attention, time to track them, and knowledge.

But you can’t have only mutual funds or ETFs in your portfolio and check them once a year. You would like to have stocks as well. And a lot of things will be changed.

So, how often to check the investments?

With stocks, things are pretty different. You have to check them at least once a week to notice if something, some event, for example, influences your investment.

If you are holding or trading individual stocks, try to check them quarterly. OK, maybe monthly if you are so nervous. It is reasonable to check your investments from time to time. But too much checking can make you panic and sell at a lower price. And you will start that chain. That frequently checking will cause trading, fast trading will cause over-selling, over-selling will produce more fees and costs. Also, if you have too much trades you will have low returns.

It is smart to pick a good investment strategy and stay with it. Check the progress of your investment quarterly and check the price, for example, monthly.

With mutual funds and ETFs, you have wide diversification, so once a year is enough.

With stocks, check it out by online approval or in the paper version. Most of the financial websites such as Yahoo Finance and some others offer stock research data. Also, your broker has quotes available.

How often to check your investments? Less is better. You are investor, investing is a marathon, it is for a long run. Make a reasonable plan, according to your risk tolerance, be patient. Rebalance your investments once a year and let your money work for you.

23rd September 2019
How To Profit By Investing In Bad Companies

2 min read

You don’t believe it is possible. Profit by investing in bad companies sounds pretty stupid and naive. But it is possible.

To be more precise, sometimes it is possible to make notable investment returns by buying the stocks with minimum chances. The key is to recognize the companies which will grow in the future.

There is some math behind. The point is to make a difference between business and stocks.

Let’s be more clear!

For example, you have some money aside and want to invest in some cheap stocks. But you find two similar companies in the same industry, say gold.

Company ABC is a large one. Gold is currently at $100, its exploration and other costs are $60, that is a $40 profit. Not bad.

Company XYZ is a disastrous business. It’s exploration and other costs of $90, which is only $10 in profit at the current gold price of $100.

Which one to choose?

The logical answer would be ABC but the wrong one.

Let’s assume the hypothetical situation.

The price of gold suddenly rise in the market, and the current it is $300, for example.

Let’s see the numbers for those companies.

Company ABC offers $240 in profit.

$300 gold price – $60 in expenses = $240 profit

Company XYZ offers $210 in profit

$300 gold price – $90 in costs = $210

But here is where the math has the greatest influence.

Company ABC earns more money for any reason, its profit rose 600% from $40 to $240. But, compare it with company XYZ which grew its profit 2,100%.

Moreover, there is a phenomenon

It is very reasonable to assume that company XYZ will experience a multiple expansion, meaning added increase. The possible final result: company XYZs stock price is raising exponentially more, much more than the stock price of company ABC.

What to say? Company ABC is maybe a healthier business, but company XYZ is better as a market choice.

How is possible to profit by investing in bad companies?

This is recognized as operating leverage.

Operating leverage describes a company’s level of fixed costs in comparison to its revenue. Companies with high operating leverage have large fixed expenses. They are obliged to cover them as first. If fixed expenses are exceeded, the revenue will fall. Such a situation may cause great difficulties for the company, from large cuts to lower profits, even bankruptcy.

You can find companies with high operating leverage in almost all sectors and industries. Gold miners, airlines, crude oil companies, are some examples. Actually, you may find these companies where the business has enormous changes in revenue. You will notice enormous profitability fluctuations. That comes because fixed costs can’t always adapt as quickly as the market value.

But you have to know that investing in bad companies carry a lot of stress and risk. Investing in some of these companies can make you rich but it is almost impossible for them to provide you a constant profit.

It’s easier to invest in some solid businesses with steady profit and dividend. You should avoid headaches.

You would like to read How to Become A Trader or Investor in Just 10 Minutes

15th September 2019
October Effect – Investing When The Stock Market Go Lower

Is October effect just a myth or there is something?

By Guy Avtalyon

The October effect is a recognized market oddity when stocks tend to fail during October. The October effect is an irrational suspicion of some investors related to previous market crashes that happened during October. Investors become superstitious, you might think. Well, the fact is that some great historical market crashes happened this month.

We will point some of them. In 1907, the Panic, later, in 1929, were three large crashes – Black Tuesday, Black Thursday and Black Monday, after almost 60 years 1987, Black Monday happened October 19, when the Dow fell 22.6% in one day. Also, on Oct. 9, 2002, the market caught a five-year low. And the market plummeted 16% in October of 2008 when the Great Recession began.

When the stock market crashed in 1929, the investors were surprised. It was quite unusual because only a few weeks before the stock market was on the highest level ever, the stock prices were 25% higher than in the year before. In October 1929 stocks dropped nearly 25% for only two days. It cost investors billions of dollars. This market crash led to the Great Depression. October has accepted as a permanent warning to investors of how suddenly wealth can turn over.

What is October Effect?

There’s no proof that this great market crashes occurred in October for any other cause. Coincidence is truly a master of the game. Since there were not too many market crashes in October, we are free to say that investors will make money during October more often than they will lose.

According to research conducted by Yardeni Research, the medium monthly return in October 2015, was 0.4%.

It wasn’t a great return but still, it was. But can we say the chain of unfortunate market events over October is broken?

The truth is that if markets go down over October, they do it very hard and painful. But just for a sec try to be reasonable. Compare the drop of 4.7% in one month with 11 good months when the average gain was about 4.1%. Everything is math.

So, we can say, at least, that October could turn high in any direction.

For investors, September is statistically the worst month since they lose approx 1% during this month. History shows that September can be difficult for stocks. Since 1950, it has been the most critical month for the S&P 500, with declined at an average of 0.5%. But, for the last 10 years, the S&P 500 has a 0.9% profit in September.

Is it possible to predict the stock market?

It is hard to predict the stock market. Markets are going up and down. You can be sure of one thing: when it is down, it will climb up. The markets go up over time and you are a long-term investor you shouldn’t be worried about the market’s condition over one month. But if you are a short-term investor your portfolio should be built mostly on cash and bonds, less on stocks. That means it is better to be a conservative investor. So, the October effect will have no or less influence on your investments.

Investors’ sentiments can become negative when October is near. That may influence the stock market play. As investors’ feelings incline to the depressed, negative market growth can produce overreactions. They will start to sell stocks in panic and the negative influence will increase more.

Keep in your mind, statistically October isn’t the worst month, it is September. But due to the great market crashes that occurred over October, we have that scary phrase – October Effect.

By the way, do you know which month is the best for the stock market? July! Remember this.
It would be amazing if the market crashes chose to happen just in one particular month of the year. Honestly, it is impossible, like the impossible is to have just one incredible good market month.

October is just one of the 12 months of the year. The difference from others is that leaves start to fall. That is the October effect.

10th September 2019
Where To Find Investors For Startups

An old story tells that almost all important brands begun as startups. Is it really true?

By Gorica Gligorijevic

Startups and corporate venture capital are yet underestimated and discredited category. The entrepreneurs are broadly seen as capricious and attached with dishonest strings. In some people’s minds, startups take the money and have protection from a powerful partner.

Is it true in real life?

Some researches show that corporates are becoming more skilled at working with startups. It is a kind of out-sourcing. The fact is, big companies invested more than $50 billion last year into startups. The year before their investment was about $36 billion.

It’s similar to Europe. You can read about very powerful companies like Bosh or Daimler that investing in innovative startups. The point is to stay in the game and it is easier to financially support some small startup than to develop the whole new section inside the corporation.

Many big companies began as startups

For example, Lyft is one of those startups, also Monzo, Bolt, etc. You just have to look at the giant’s investment portfolios.

But, it isn’t the main subject. It is good to have such big corporations ready to invest in venture capital. The problem is if you are an entrepreneur, which company is ready to invest in your business, what is their interest, how to contact them. If you want to invest in Europe you will need some valuable information. So, Traders-Paradise recommends Dealroom, where you can find fantastic data.

We will present you with the list of three but with the promise that we will update.

Robert Bosch Venture Capital

Its headquarters are in Stuttgart, Germany. As the sub-organization of Robert Bosch, it is normal that engineering technology is their focus. Its investments in AutoAI, Actility, Movidius, etc are well-known. With offices in Stuttgart, Frankfurt (both Germany) and Tel Aviv, Shanghai, and Sunnyvale in California, US we can say it covers almost all continents.

The company says about itself:

“With offices in Europe, Silicon Valley, China, and Israel, we are working with Deep-tech companies worldwide. Having our investment sweet spot at an early stage we are also looking into later-stage companies, as well as seed-stage in selected cases. We prefer to syndicate our investments with existing or new investors in the company and can take the lead, co-lead or follow as necessary. Beyond the financial commitment, startups receive access to our vast network and support in commercial collaborations. Up to EUR 15m per company for 5-25%, Equity Position and 100% Commitment”

When they are investing in startups and venture capital their focus is on AI/Deep Learning, IoT, Distributed Ledgers, Analytics, Next Generation Computer Architecture, AR / VR, Mobility Solutions, Autonomous Driving, as we found on their website.

Novartis Ventures is one of the startups

Their headquarters are in Basel, Switzerland and they operate as sub-organization of Novartis, a multinational pharmaceutical company also based in Basel. They already have been invested in Nabriva Therapeutics, Proteus Digital Health, Galera Therapeutics, etc.

The essence of their investment strategy we found on their website:

“Our primary focus is on the development of novel therapeutics and platforms. In our investments, we look for unmet needs and clinical impact, novel proprietary science, and understanding of the mechanism, management, and board experience and capital efficiency in the program. Foster innovation, drive significant patient benefit and generate superior returns by creating and investing in innovative life science companies. NVF is stage agnostic, engaging in investments from seed- to later-stage life sciences companies across Biotechnology/Biopharma. NVF manages over $800m in committed capital and more than 40 portfolio companies across North America, Europe, Israel, and Asia/Pacific. We invest in North America, Europe, Israel, and Asia/Pacific with approximately USD 800 million under management in committed capital and more than 40 portfolio companies. We continue our strategy of making larger focused investments and anticipate total investments up to USD 30 million per company over its life. We make equity investments in Biotechnology/Biopharma life sciences companies. NVF is stage agnostic and engages in seed investments as well as later-stage investments. We typically lead or co-lead an investment and play an active role on company boards.”

So, you can see that health is their focus while investing in startups.

Swisscom Ventures

With headquarters in Zurich, Switzerland operates as a sub-organization of Swisscom. Their business focus is on communications. Since now, they have already invested in startups like SimpliVity, Symetis, Quantenna Communications.

What they say about their investment strategy Traders-Paradise found on their official website:

“We are investing in Swiss and global technologies to foster digital transformation. More than 40,000 new companies are set up in Switzerland every year. We look in particular at the Swiss high-tech companies and University Spin-offs as they are fundamental contributors to the economic growth and innovation of Switzerland. We are typically leading or co-leading financing rounds from the early beginning and also take board seats. As a strategic investor, we offer entrepreneurs to access a broad range of portfolio services in addition to financial support. Those comprise the use of Swisscom’s technical infrastructure but also access to market channels and key experts in the lines of Business.”

They say about their investment focus:

“Artificial Intelligence – Digital applications utilizing artificial intelligence technologies and that are deployable across various industry sectors including data-driven internet services

Cybersecurity – Advanced applications and tools to protect the integrity of networks, programs and data from attack, damage or unauthorized access

Telecom and IT Infrastructure – Next-generation IT and cloud technologies that constitute the backbone and underlying enabler to the digital transformation comprising software, hardware, and services”

How to start up your own bussines

Just take a look at the list of supported startups and you will see how good is to have the strong arms behind you when starting your own business. Sometimes it looks really hard to find an investor to give life to your good idea. But, did you try? How many contacts you have? On how many doors were you knocked?

Just don’t sit in your room and don’t cry how nobody understands you.

Take the initiative. Be proactive! And have confidence in your abilities. Who never try, never knows. Try! And the door will open to you. Find an investor!

Traders-Paradise will update the valuable information of this kind.

1st August 2019
One share of stock – is it worth buying

3 min read

One share of stock – Is there any benefit to buying one? Is it better to have a bunch of shares or not? A dozen? 100? 150? 200? The answer is typically less than the number of fingers on the hand. A ruling principle of stock investing is to spread your portfolio throughout several companies.
But, what if you don’t? What if something bad happens to your single investment? You will have practically no way to cushion the disaster. The misconception in managing a portfolio is that should contain numerous stocks.

Why is this opinion a mistake?

Yes, your exposure to risk in individual stocks is smaller. But, at the same time, you are also reducing the chance to make large profits in the big winners. There is a simple reason behind this: You won’t have enough shares to enjoy the gains. But there is a disadvantage of an over-diversified portfolio is that it takes a lot of commitment to watch over many companies, follow their rise, reports, and other progress.

If you have a smaller number of shares, it’s easier to follow the companies you own.

Yes, truth is, investing all of your money in the stock of only one company is very risky. You can suddenly lose most of your money. But it also has the potential for huge returns. There are numberless stories about investors getting into a company that went onto great things.

For example, if someone was able to buy Apple in its early days, such has made a lot of money nowadays. Moreover, one share of stock was good enough.

But, there are a lot of risks here.

Very often, those stories don’t include the fact that the investor made a lot of investments that failed before the big success happened. If you make 25 investments and they’re all average and suddenly make one that earns a big return, your overall return is not that big. The stocks can sometimes increase value, but companies can often totally fail. In that case, their stock is worthless.

In fact, entire business areas can become insignificant over time. Some companies were probably good investments several decades ago.

For example, producers of VHS cassettes or floppy disks. What we want to say is, you can invest in a big company to reduce the risk of losing, but that also drastically reduces the chance of big success, too. Some companies can be as steady as a rock, but still, it’s not likely to quickly double your money, either.

Is buying one share of stock worth It?

It is not about how many shares of a stock you buy or sell in one transaction.

Stock brokerage firms usually charge the same commission. For smaller transactions, the fees represent a higher percentage of what you’re paying for the stock itself.

Buying under 100 shares can still be worthwhile if you think you’re going to make sufficient money on the investment to cover the fees. To decide for yourself if a small trade is worth it, you’ll want to look at your brokerage’s commission and the actual stock price.
Buying 50 shares of Berkshire Hathaway could cost $15 million since one class of stock in the company has traded above $300,000 a share, for example. But, other companies’ stock trades for as little as a penny, so buying 50 shares would cost you 50 cents. A commission of $5 dollars on a 50-cent purchase has a much different effect on the total cost than a $5 commission on a $15 million purchase. Don’t you think? It is important to evaluate whether or not the commission fees charged to you will still make the investment profitable.

One share of stock – Fewer is better

For a beginner portfolio of about $3,000, just two stocks are enough. But for a portfolio of $5,000 to $20,000, three stocks can be an easy load. Hence, for portfolios up to $200,000, four or five stocks are enough. Also, those who have more than a million dollars to invest should restrict themselves to six or seven stocks. To have success with some of the stocks, you have to make the right selection. This doesn’t mean you have to make excellent choices.

All you need is a careful process of selecting companies with superior profit and sales growth. Deduct the stocks lacking good chart profiles, and you end up with a shorter list of potential investments.

How to evaluate

Watch at the current share price, calculate the price at which you would sell that stock, and determine the difference. Now, calculate that price by the number of shares you plan to trade to see how much your profit would be. It is without commissions. Then, deduct the commissions you’d pay to both buy and sell the stock. And you will find if the transactions seem worth it.

Remember, you have to consider the risk involved. The stock might not play as well as you suppose.

Lower share price means less expensive

That’s where most people start. But it is wrong. The price per share of any company you want to buy should be almost trivial to you. You should think in terms of your overall money invested. That’s how you should allocate. Don’t even think of what a stock’s price is, or how many shares you get.

You have to be sure that you are buying solid companies that you feel it is good for you. Your portfolio should reflect your idea of the company’s future. The share price is meaningless. For example, Google is $700 per share, Apple is $100 per share, that doesn’t say anything about either company or whether or not one is a better investment over the other.

Why the price of a share doesn’t matter?

You should not make an investment decision based on the price of a share. Look at the books to decide if the company is worth owning, then decide if it’s worth owning at its current price. The price of the stock is made by how many shares were issued and how much people think the company is worth and will be worth it. The first factor can change in a stock split and without the others changing.

What you really need to look at is what you think the future of that company looks like. But as most important, what that might do to the stock price and to the dividends it pays to stock owners.

One share of stock can be good

Honestly, there is no difference between more shares of a cheaper stock and fewer shares of more expensive stock. When you invest in a stock, the increase in the share price results in gains. This is a major concept of investing.
Trading real money can be difficult without a sharp understanding of the principles involved. Investing your money without good knowledge will be stressful. It could have a discouraging effect if it doesn’t go properly.

The bottom line

There is no minimum order limit on the purchase of a publicly-traded company’s stock. It’s prudent to buy portions of stock with a minimum value of $500 to $1,000. As you already know, there are commissions on the trade. Whether you own 10 shares at $200 or 200 shares at $10, you still own $2,000 of a company. If that company’s market value grows by 10%, you earn $200 in any case.
It is easy to find online discount brokers that allow you to buy fractions of shares of higher-priced stocks. So, if you don’t have enough to buy a full share it shouldn’t stop you. Also, if a company you want to own but you don’t have enough saved to buy a share, keep saving. Simple as that. It doesn’t matter if you buy now or a few months from now.

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13th March 2019
Should You Leave Crypto, Get into Cannabis and ‘ Buy high’?

This topic is a small semantic game with words. But it seems to be a serious business.

By Guy Avtalyon

I want to be a clear, cannabis business is serious business.

Marijuana is a commodity, and commodities markets are subject to boom and bust, amazing and caught.

Canadian marijuana company Aurora Cannabis Inc.’s shares rose about 4% Thursday, October 18, after it said shares have been approved for trading on the New York Stock Exchange starting October 23. Even earlier, the hype around cannabis stocks was catching up to the crypto craze.

There’s a huge new trend that is sweeping the investment world. The rise in the legalization of marijuana caused the development of a new investment opportunity. Cannabis Shares, for example, allows investors to buy shares in many legal cannabis-based projects, including the sale of cannabis itself, or products of cannabis.

Merida Captial Partners, a New York investment firm, said its cannabis fund had been approached by around 50 cryptocurrency investors. “They are looking at cannabis and crypto as an emerging sector,” said Merida managing partner Mitch Baruchowitz, “they might not be connected as industries but they are seen as outside the traditional investment field. High risk and high reward.”

On the market, the stock ACB ( Aurora Cannabis Inc.), +1.40% ACB, +1.40%, will trade under the ticker symbol “ACB”. The shares are also traded on the Toronto Stock Exchange. This news came one day after Canada fully legalized cannabis for adult recreational use, the first G-7 country to do so, and only the second in the world to do so after Uruguay.

Canada changes the world following the passage of the Cannabis Act on June 19.

Which country first legalize recreational marijuana?

Canada became the first industrialized country in the world to legalize recreational marijuana.

In the process, it opens the door to possibly $5 billion in added annual sales. This industry is already generating from domestic medical weed and exports to foreign countries where medicinal cannabis has been given the green light.

Finance barons like to turn any commodity into an investment opportunity. This move was inevitable with the international changes in cannabis legislation. But, many are willing to see similarities between cannabis shares and cryptocurrencies. And they starting to worry that the cannabis industry could wipe out the need for crypto-investment.

Within the stock market, no asset class has been hotter than pot stocks over the past few years. Many of the largest marijuana stocks by market cap have doubled or tripled in value over the past year, and are up by more than 1,000% over the trailing two-year period.

Why cannabis stocks are so interesting?

The fundamental lure of marijuana stocks is its impressive sales growth potential. ArcView, a leading cannabis research firm, suggests that North American legal weed sales could grow by 28% between 2018 and 2021. That would lead to almost $25 billion in annual legal cannabis sales.

And the public all over the world is in favor of marijuana legalization. All major marijuana polls demonstrate strong favorability toward legalization.

All six-pot stocks have enjoyed outsized gains in the last few months as Canada legalization appears. These pot stocks generate quarterly and annual profit: Aurora Cannabis Inc. ACB, +1.40% , Cronos Group Inc. CRON, +0.66% was up 3.8%, Canopy Growth Corp. CGC, -3.51% WEED, -2.77% was up 2.1% and Tilray Inc. TLRY, +2.89% was up 3.2%. GW Pharmaceuticals Plc GWPH, -1.30% was down 0.7% and Aphria Health Inc. APH, +0.26% was up about 2%.

Why people love cannabis stocks?

Tilray is a Canadian cannabis firm, one that announced in September that they traded around $6.5 billion worth of shares on United States exchanges, at the same period Amazon, traded around $7.6 billion on the same exchanges. Amazon has a stock 47 times the size of Tilray, therefore, we can truly appreciate the full scale of this as an investment opportunity.

Some skepticists are suggesting that the crypto craze is coming to an end, but we know that this isn’t the case. Markets are stagnant because of a transition period. Frankly, they should know that the crypto craze hasn’t yet begun. Cannabis shares are more like traditional commodities and traditional stocks, therefore they are more attractive to a high level and institutional investors. Because institutions are investing in them, the level of cash flowing into Cannabis shares is such. Cryptocurrency has not yet penetrated the mainstream and therefore, there can’t be a threat from Cannabis Shares.

Investment advice website. Proactive Investors has started a dedicated Telegram channel for investors interested in cryptocurrency, the blockchain, and cannabis. The SEC stated: “Fraudsters may try to use media coverage about the legalization of marijuana to promote an investment scam.”

On the social messaging app Telegram, some cryptocurrency forums, where users trade investing tips and advice on the anonymous network, have now turned their attention to shares in cannabis growers.

Cannabis Stocks vs Bitcoin

Why should anybody go to think that individual and personal Cannabis Shares investors, couldn’t also invest in cryptocurrencies as both are new and exciting ventures? Overall, it’s not fair to compare the two. They aren’t a threat to each other. A lot of investments can exist side by side. Because Cannabis Shares are big and popular for many reasons, it doesn’t mean people will stop investing in Bitcoin. Yes, their attention may be rerouted, but this will constantly change.

“Crypto traders I know are getting into pot stocks,” Jeffrey Van de Leemput, founder of investing-education platform Cryptocampus, said in a message, reported Bloomberg. “But I don’t know if that’s a pattern or just coincidence.”

Who’s been behind the buying of pot stocks? I have a hunch that its investors tend to be young. It’s the millennials.
There is the potential for marijuana to be traded as a commodity, similar to how corn and other agricultural products are now bought and sold, or as asset-based security, similar to the way mortgages have long been bundled and sold to investors. Who knows, the cannabis futures market might be the largest futures market in the world.

But Bitcoin has no plan to become mainstream on the market, it isn’t in its nature.

Going in bitcoin’s favor, retail investors predominantly control the show. The most bitcoin trading occurs on decentralized cryptocurrency exchanges, and institutional investors usually want nothing to do with these decentralized exchanges, bitcoin is driven by the emotions of retail investors, rather than by fundamental reason. And emotions can be the most powerful tool in pushing Bitcoin’s valuations higher.

Which investment should you buy with your last $50? Cryptocurrency or marijuana stock? Both of these investment opportunities are like a plane, they are getting everyone on board and they are ready to fly with or without you.

19th October 2018
How Do Dividend Paying Stocks Work?

Dividends may be a sign of good stock but never invest in some stock just because of dividends it pays.

By Guy Avtalyon

The dividend is like interest on a loan. A company that earns real money every year operates with it on three options. First, the company can reinvest earnings to make new products, find more customers, or to make business more efficient. Some companies can buy back their stock in order to own more of the company and more profits. The third way is to return some of the money to shareholders through dividends. It is very important to understand how dividends work. Stocks that pay dividends can be great to hold.

Dividends are like interest on a loan. Assume you loan your relative $1000 for a year at 5% interest. You expect to get back your $1000 plus that 5%, which is $50 more. The dividend is that except the $1000 stays in the company because you still own part of it. It’s your part of the profit the company made.

Unfortunately, not all companies will pay dividends. Some companies don’t make the profit and they can’t pay out anything. Other companies flow all of their money back into the company to grow faster. The rule is there is no rule. What works for one business doesn’t work for others.

Is investing in dividends a good choice?

I know some people who like to receive dividend checks. For instance, some reliable companies may payout every three months. Even if the share price has small moves every year, investors still make money from these dividend payments and they don’t have to sell their shares to get that money. The check comes at the end of a certain period.

This money gets paid to all shareholders, no matter how many shares they own. The retiree who owns one share of some company gets the dividend in the same way as the wealthy hedge fund manager. The reliability of dividends gives them attractivity in investment.

Do Stock Pay Dividends?

High dividend-paying stocks have rates of 5%, 10%, or even more.

Why they are so high? It is simple to explain. Let’s see this simplified example.

A company with a share price of $100 which pays a dividend of $1 per share every year has a dividend yield of 1%, while a company with a share price of $10 which pays out $1 per share every year has a dividend yield of 10%.

Notice that the price you pay for a stock and the growth of the business over time determine how much money you make on that stock. Keep in mind there’s no shortcut to investing little money with high returns. Unfortunately, but that’s true.

The easiest way to find if a stock pays dividends is to look at any stock research site. You will find a dollar amount for the latest dividend announced, the annual amount paid, and the current yield. Always check the dates. The point is that stock may pay out one quarter and not the next.

Is it profitable to invest in the high dividend-paying stocks?

High dividend-paying stocks are paying more than the average dividend rate. Companies that pay high dividends are considered as good companies. But they may have some other reason like to attract investors to drive up the share price. It also may be a sign that the share price has dramatically gone down recently. Sometimes this means the stock is on sale or that the company is in trouble. You can’t know this just by looking at the share price or how high is the dividend amount. You have to have better information about the company’s business and its current financials.

The company must choose to pay a dividend and the amount paid may vary. Not all companies will regularly raise the number of its dividend payments.

Is investing in stocks that pay dividends a good strategy?

Yes, especially if you want regular cash coming in reliably. Reliability is the keyword because dividends aren’t guaranteed. You still have to do your research. It is better to buy great companies, not just stocks that pay the highest dividends per share.

High dividend stocks are not necessarily a good investment. Pay attention do they pay them every year, every quarter or does a certain company follow a regular schedule for the rise of its payment amount. It is possible to make more from dividends every year per share than you initially paid for the stock. Keep in mind this the tricky part of a dividend yield of stocks; it’s always calculated relative to the current price, not what you paid. A company that pays a huge dividend is a warning sign. How does the company plan to maintain its payment strategy? Is this a temporary trick to raise the stock price to fake levels? Always think about reliability.

Does value investors make money from high dividend-paying stocks?

Dividends are excellent. And value investing looks for underpriced stocks.

“What are the best stocks to invest in?” or “What are the reasons to invest in a company?”, can be the questions you ask yourself. In that case, dividends may be a sign of a good stock. But not all great stocks pay dividends, indeed. Some never do. Some pay from time to time. It depends.

If you pick a powerful company that gives you a check every quarter and if the price is right relative to the value, then you have no problem. That gem belongs to you.

18th September 2018