Wal-Mart: Discount Store, Discounted Stock?Written by Dr. Charlie Tian
As GuruFocus (http://www.gurufocus.com/) updates stock buys and sells of gurus, Wal-Mart (WMT), discount retail giant, stands out as stock with a high ValueRank (7 out of 10). Just recently, Clipper Fund’s James Gipson and T. Rowe Price Equity Income Fund’s Brian Rogers bought Wal-Mart. Oakmark’s legendary fund manager Bill Nygren was first guru that bought Wal-Mart. He bought at price of $53 a year ago. Bill Ruane, Graham-and-Doddsville superinvestor recognized by Warren Buffett, bought about 700,000 shares Wal-Mart at similar price in fourth quarter of 2004. As stock price drifted down, he added another 380,000 shares, bringing his total holdings to 1.1 million shares. In last quarter, James Gipson purchased 2.8 million shares of Wal-Mart for his famed Clipper Fund, and Brian Rogers bought 4 million shares of Wal-Mart for his $19 billion T. Rowe Price Equity Income Fund. The price of Wal-Mart did not go up, not yet. If an investor buys Wal-Mart today, he pays a lower price than what Bill Nygren and Bill Ruane had paid. If he is patient enough and holds stock until price appreciates (finally), he will beat these best investors on this investment.
| | Buying a Home with Zero Down Payment in Irvine, CA Written by Vincent Bindi
Years ago, only person that could buy a home in Irvine with zero down payment using a new purchase money loan were Veterans of War (called a VA loan). In past several years, there has been an explosion of new loan programs designed to fit most any buyers circumstances. Today, most anyone can buy a home with zero down payment if they have sufficient income and decent credit. There are three factors that determine if you have sufficient income to purchase a home with zero down payment, and they are: Purchase price of home, Interest rates, and debt to income ratio that mortgage program requires. These three factors are interrelated as described below. The debt to income ratio is monthly mortgage payment of zero down loan, divided by your monthly gross income (not your net take home income). This ratio can vary from 35% to 50% dependent upon loan program, and your credit score. The monthly mortgage payment is determined by purchase price, current interest rates, and type of mortgage program, such as 15 versus 30 years, fixed versus adjustable interest rate, etc. There is another ratio that mortgage lenders look at which is total debt to income ratio which is too complicated to discuss here. This ratio also analysis other debts that you may have such as car payments, credit card payments, etc. You’re your credit rating is reported by three different reporting agencies called Experian (formerly TRW), EquiFAx, and TransUnion. Your rating is boiled down to a single number, called your FICO score. An excellent FICO score would be about 800 and higher, and good score is about 700 to 800, an average rating is about 600 to 700, and a poor FICO score is below 600. Some mortgage lenders even have some zero down loan programs for borrowers with poor credit ratings at somewhat higher interest payments and lower debt to income ratios.
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