12 Credit Safety Tips - Credit WatchWritten by Itna Yeknom
Credit Advice and Credit Tips for Shopping Safely. Credit Card Safety. How to keep your spirits bright and your wallet full during holiday season and others. Whether you are celebrating Christmas, Eid, Hanukkah, Kwanzaa or just living life this year, make sure you keep track of your holiday spending to avoid a New Year full of debt. Create a holiday budget that includes gift buying, decorating and entertaining expenses. Make sure list is within your budget and stick to it! Don't blow your balances. Check your debt analysis Free Calculators online before you start to shop to see how much you can really afford to charge. If your debt reaches more than 50% of your available credit, you could see your Credit Score drop in January. Keep an eye out for Identity Theft Identity Theft during holidays. Sign up for Credit Alerts that will swiftly notify you if a Grinch has stolen your personal information. Get creative with your decorations instead of spending a fortune. Paper snowflakes, pop-corn chains and homemade wreaths are just as festive as expensive store-bought decorations.
| | Finding Undervalued Stocks 2 - Revisiting Graham's RulesWritten by John B. Keown
In a previous article, we discussed Ben Graham's Net Current Asset Value (NCAV) strategy and how it works. Here we will revisit Graham's rules, which were fairly severe in their original form in that they required price of stocks under consideration to be trading at less than two-thirds of their NCAV or Graham's Number. These he considered to be "Bargain Issues", and to quote him: "Our purchases were made typically at two-thirds or less of such stripped-down asset value. In most years we carried a wide diversification here-- at least 100 different issues." Such a wide diversification may seem excessive for most investors, but with such low-priced stock there were evidently going to be a few bankruptcy candidates. Graham considered this strategy to be suitable for what he called "defensive" investors. He did acknowledge, however, that there were some "enterprising" investors who could afford to be more aggressive from point of view of risk. To this end, he suggested a series of less onerous criteria for selecting stocks which is outlined below. First, list all stocks with Price/Earnings ratios below 9. Note: Graham was writing in 1970 when P/E's as a whole were not as elevated by technology stocks as they are today. Readers who are less risk-averse or who just want to consider a wider range of stocks may wish to vary P/E in order to see what comes up -- perhaps up to 80 percent of average P/E of S&P 500 would be a good start. Currently operating average is around 18 and 85 percent of that figure is just over 15. Graham did not state if he was using a Trailing or Forward P/E ratio, but most likely he was using Trailing P/Es. I personally prefer to use Forward P/E ratios, especially if they are significantly lower than Trailing P/E as this implies expected earnings growth and therefore possible increase in stock price. Once we have a list of stocks meeting P/E criterion, we consider financial condition of each stock, referring to most recent balance sheet: Initially, Current Assets must be at least 1.5 times Current Liabilities. This can also be gleaned via a stock screener by displaying stocks with "Current Ratio" >= 1.5. Total Debt must not be greater than 110% of Net Current Assets (i.e. sum of Cash & Cash Equivalents, Inventory, Accounts Receivable).
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