Insider information

As an investor you probably believe you can outsmart the market. You are sure you can pick the right stocks at the right time. Furthermore, you will sell these stocks at exactly the right time. The execution of your investment strategy gives you a return that exceeds the return of the market, year over year. Even better, you make this return with a lower risk profile than the risk profile of the general market.

Information

Having the right information is very important to become a successful investor. Most information that is released by companies will not shock the market in a dramatic way. But it always pays off to keep an eye on news about a company that you invest in, or would like to invest in.

As an investor you should keep in mind that you will never be able to track the news of all companies. There are simply too much companies and investment possibilities. Spitting through the press releases of all companies will keep you off the street for a long time. And when you can go out again, you will find another pile of press releases.

Create your own portfolio of companies that you like. I like to call this my opportunities-portfolio. Keep track of information that is released about these companies. And if there is information that you think you can benefit from, invest in these companies. This will allow you to keep a close eye on the news, and still are able to get out from time to time.

Timing of information

But information is not the single most important thing that an investor needs. Timing of that information is. When you get information at the time that the market has already reacted on this, you will not be able to benefit from that. The sooner you can get a hand on information of companies in your 'opportunities-portfolio', the sooner you can invest in them. And this means that you can benefit from changes in the stock price for a longer period.

Sell in May...No way

One of the most famous phrases of investors says that you should sell your shares in May. It also says that you should make sure to own them again in September. We were curious whether this saying is actually correct. Should you go on holiday after May and make sure to be back in September?

We set up an analysis to test the famous saying. As an investor, you should really reconsider this investors'knowledge', since it does not matches the results.

Price/earnings growth

As an investor, you want to make a profit on your investments. The way to do this is to buy the right companies at the right time. And to sell them at the right time. To achieve this main goal, there are a lot of different valuation methods and indicators around. One of these indicators is the profit-to-earnings growth, or PEG, which is based on the price-to-earnings ratio.

Benjamin Graham

One of the most famous and successful investors of the 20^th century, is Benjamin Graham. He was one of the first value investors. Other investors had used the same approach on investing before. But since Benjamin Graham began teaching value investing, it became more common.

Successful investors: Sir John Maynard Keynes

In this new series of articles, successful investors are honored. The life of these successful investors will be described briefly. And naturally the investment methods of these successful investors will be explained. This way, you can get an insight in how these investors became successful and what you can learn from these successful investors. The first article in this new series: Sir John Maynard Keynes.

Discount model part 4: Profit

This article about using the profits of a company for calculating the company value is the final part in this series. Part 1 discusses the general principles and calculation of the discount model. Part 2 and 3 explain the calculation of the company value with the discount model using the cash flow and dividend.

Investors cash flow

Many investors use the cash flow of a company as an important indicator. Investors find a company with an increasing cash flow worth investing in. When the company has a negative or declining cash flow, investors will think again about investing in such a company.

A positive cash flow means that the company can continue their current operations in the future. On the other hand, a company that will spend more money than it receives, the company will not be able to pay their bills in the future. So the cash flow determines the continuity of a company.

Discount model part 3: Dividends

In this part of the article series about the discount model, I will discuss the dividends discount model (or DDM). In previous articles in this series, the basis and calculation of the discount model and the cash flow discount model are described.

In this article, I write about the pros and cons of the use of the dividends when calculating the discount of shares of a company. Besides that, I also explain the specific principles and attention points for the dividends discount model. I will also discuss the origin of the discount models (not specific the dividends discount model) and the investors that use the discount model.