Tag Archives: money management

How to Force Yourself to Save Money

I just created a YouTube video about an idea called forced savings. We all want to save money, and we all know we should, but honestly, it’s not easy. Life is expensive. Even with this idea, it can be hard, but I think that most people could genuinely do it to create a building block for wealth creation.

Here’s the video:

Basically, this is a way to create essentially a tax on your spending that goes into one’s savings. I think the best way to do this is to open an investing account and invest the forced tax.

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Why Options Trading Is More Risky and Less Risky Than Buying Shares

Options trading, while being very popular, doesn’t necessarily have the best reputation. Many people associate it with gambling (and the way many people do it definitely is) and claim that it is very risky. While it definitely can be very risky, options trading can actually be less risky than buying shares.

Options trading is when someone trades the option to buy or sell a certain number of shares (one contract is usually 100 shares) of a stock at a particular price at a particular date. If one thinks a stock is going to go up, they buy a call option and if they think it is going to go down, they buy a put option. That’s a simple explanation of a complex thing but that’s the basics.

Let’s say one was going to buy a call option. The premium that option is trading at is $2 a share. The option is for 100 shares so they pay $200 for the options contract that expires in two months. In two months, if the stock went down instead of up, they lose that $200 and the options contract expires worthless. If the stock did go up, they can buy 100 shares of the stock at the strike price of the options contract or sell the contract. That is why options is considered so risky. You can lose the entire initial investment.

Here is why options can actually be less risky than stocks though. Let’s take the same example from the paragraph above. Someone buys a call option on a stock at a $2 premium per share and pays a total of $200. The stock goes down at the expiration date, and they lose $200. Now let’s say instead that they bought 100 shares of the stock instead. If the stock went down by enough, they could actually lose a lot more money than the $200 from the option contract. Options can give investors access to a lot of shares at less downside risk.

Options are definitely not for everyone, but they can be a good addition to one’s portfolio.

Concentration vs Diversification: Stock Market Investing

“Diversification may preserve wealth, but concentration builds wealth.” – Warren Buffett

When buying stocks, one question that must be asked is, how many should I own? This is especially true for people who are wanting to build wealth and not just preserve wealth. It’s also a tough question. There’s an obvious answer at first, but there is also a ton of caveats to the answer.

If one had one stock or one industry that could consistently beat the market overtime, it would obviously make sense to concentrate on investing into that one stock or industry. It would create the most wealth. The issue, however, is what if the stock or industry one is concentrating on ends up underperforming? What if they get it wrong?

While concentrating on one or few stocks or industries is the smarter choice when done right, it is also far riskier. Because when it isn’t done right, it can be costly.

Diversification, on the other hand, can also be risky. One runs the risk of losing potential gains. Let’s say one has a diversified portfolio. They have a couple stocks that overperform the market while the rest of their stocks vastly underperform. They end up underperforming the market because their losers negate their winners. If they had concentrated their money into just the winners, they would have been in a much better financial position.

My portfolio is pretty diversified. A lot of my money is in exchange traded funds (ETFs), and these ETFs are very diversified. I then have my individual brokerage account that is pretty concentrated into select, mostly small-cap, stocks that I believe will beat the market over a long period of time.

While concentration, when done right, is the best way to increase wealth. My hatred of losing money is slightly greater than my wanting to make money even though I do believe that my portfolio will beat the market.

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Fiserv Inc. Analyst Expectations: Projected Revenue and Growth Outlook

Disclaimer: This analysis is not financial advice and is for informational purposes only. Please conduct your own research or consult a financial advisor before making any investment decisions.

About Fiserv Inc.

Fiserv Inc. is a global leader in payments and financial services technology. The company provides a wide array of services including electronic payments processing, point-of-sale services, and financial data management. Fiserv’s innovative solutions cater to both financial institutions and businesses, helping them enhance their operational efficiencies and customer experiences.

Stock Valuation

When evaluating Fiserv Inc. stock, several key metrics stand out. The stock currently has a price-to-earnings (P/E) ratio of 28.07, indicating how much investors are willing to pay per dollar of earnings. Fiserv’s market capitalization, or the total market value of its outstanding shares, is $88.08 billion. This valuation suggests strong investor confidence and significant market presence.

Fiserv is trading at 3.08 times its book value, reflecting a premium investors place on the company’s assets and growth potential. Financially, Fiserv holds $1.21 billion in cash against a debt load of $24.54 billion, resulting in a current ratio of 1.06. This ratio, a measure of the company’s ability to cover its short-term liabilities with its short-term assets, suggests a slightly tight liquidity position.

Analyst Expectations

Analysts hold a positive outlook on Fiserv’s growth trajectory. They project the company will grow its revenue by 6.7% this year, reaching $19.25 billion. Looking ahead to 2025, they expect revenue to increase by 9% to $20.98 billion. These projections indicate strong and sustained growth in Fiserv’s core business operations.

On the earnings front, analysts are optimistic about Fiserv’s profitability. They forecast earnings per share (EPS) to rise to $8.71 in 2024, up from $7.52 in 2023. By 2025, they expect EPS to further increase to $10.11. These anticipated earnings growth rates suggest robust financial health and an effective business strategy.

Conclusion

Fiserv Inc. presents an intriguing investment opportunity with its solid market position and promising growth outlook. Despite the high debt level, the company’s consistent revenue and earnings growth projections underline its potential for long-term value creation. Investors should weigh these factors and consider their own risk tolerance and investment goals when evaluating Fiserv as a potential addition to their portfolio.

As always, it’s crucial to conduct comprehensive research and consult with a financial advisor before making any investment decisions.

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AssetMark Financial Holdings, Inc. Stock Analysis

AssetMark Financial Holdings (Ticker: AMK) is a wealth management company based in the U.S. They currently manage around $55.2 billion in client funds and has around 344,000 clients. This stock has been on my watchlist for a while now, and in this article, I want to answer the question, is the stock a buy?

AssetMark is currently trading at a market cap of ~$2.6 billion. They have a p/e ratio (price/earnings per share) of 21.09 and are trading at 2 times their book value. The company currently has $235.68 million in cash and $124.36 million in debt. This gives them a current ratio (calculates how well a company can pay their debt) of 3.84 which means that the company could pay its debt 3.84 times over. Judging by its trading multiple of 21.09 times their earnings per share, this is a company that needs to be growing well for me to consider buying it, so with that in mind, let’s look at the growth.

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Analysts are expecting AssetMark to make $2.60 per share in 2024. They are also expecting the company to grow earnings per share to $2.75 in 2025. In 2023, the company earned $2.30 per share. Analysts are also expecting the company to generate $610.64 million in revenue in 2024, and they are expecting that to grow to $657.96 million in 2025. In 2023, the company generated $546.08 million. This represents 11.8% growth in 2024 and 7.70% growth in 2025. These numbers, however, are projections and there is no guarantee that AssetMark will hit these. Although, AssetMark has managed to grow both revenue and earnings every year over the last four years.

While the company is trading at a decent premium to its earnings, I do think that the company will continue to grow. I most likely will be buying shares of this stock, but this is not financial advice and is for informational purposes only so do your own research before buying the stock.

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Trump Media and Technology Group Went Public Via SPAC

In a move that has stirred both curiosity and skepticism, the Trump Media and Technology Group recently made headlines by going public through the acquisition of blank check company Digital World Acquisition Corp.

Trump Media and Technology Group, led by former President Donald Trump, is the owner of social media site Truth Social. According to searchlogistics.com, Truth Social boasts approximately 2 million users, positioning itself as a platform for conservative voices in an increasingly polarized digital landscape.

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However, despite the buzz surrounding its flagship app, Trump Media’s financial performance leaves much to be desired. In the first nine months of 2023, the company reported a mere $3.4 million in revenue—an underwhelming figure considering the lofty expectations set by its ambitious valuation. With the company trading at almost an $8 billion valuation, it’s evident that the market is assigning a premium to Trump’s name rather than evaluating the company’s actual business fundamentals.

The disparity between Trump Media’s valuation and its revenue raises red flags for investors. As an investor, I would exercise caution when considering Trump Media’s stock. While I believe the company is vastly overvalued, I would hesitate to short the stock, as the market has proven time and again its propensity for irrationality over extended periods.

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In conclusion, the Trump Media and Technology Group’s entrance into the public markets has, so far, been very successful for investors of the stock. The company is trading at a very large premium relative to its revenue and is nowhere near profitability. It’ll be interesting to see where the stock goes from here.

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Cash-Secured Puts Explained (Options Strategy for Generating Income)

Just posted a video presentation explaining cash-secured puts. For those looking for a way to use the stock market to generate income or buy shares at a lower price, this is a good thing to learn.

Here’s the info:

The Value of Small Cap Stocks

A big advantage that individual investors have over Hedge Funds and Mutual Funds is that large funds cannot buy small-cap stocks at least it wouldn’t make sense for them to. The average Hedge Fund has $26 billion under management. A small-cap stock is one with a market cap between $300 million – $2 billion. If a Hedge Fund wanted to buy a stake in a small cap stock, it’d be such a small part of their portfolio that the stocks return wouldn’t really matter. This is why these funds mostly don’t buy stocks of this size.

That is one of the reasons small cap stocks are such an advantage to the average investor. They get to buy into these companies before all the institutional money even can. If one buys a small cap stock and the stock keeps growing, it will eventually be big enough where institutional investors can deploy enough capital into the business for its returns to matter, but it can be very beneficial to buy into these companies first.

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Also, small-cap stocks have more opportunity. It is much easier for a stock trading at $2 billion dollars to become a company worth $200 billion than it is for a company worth $200 billion to become worth $2 trillion. Investors looking to 10x their investment have a much better chance in small-cap stocks than large-cap stocks.

Now, this isn’t to say that small-cap stocks don’t have disadvantages as well. First, they are far more volatile. They also have a much better chance of going bankrupt than a large-cap stock.

Not all small-cap stocks are created equal either. We look for small-cap stocks that are growing year-over-year while trading at a reasonable premium relative to its earnings. There are other important factors to look at as well when buying a stock, but we look for stocks that are growing both revenue and earnings year-over-year.

I don’t believe that anyone should only invest in small-cap stocks, but it can be very beneficial to include them in a portfolio.

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How to Find Stocks to Invest In

If one decides to start investing in stocks, the question then becomes: well, what stocks should I buy? More importantly, how do I find stocks worth buying? There are thousands of stocks out there, so it can be hard to choose. One thing that I believe is that because one can buy funds that replicate the market itself, there is no reason to buy any stock that one believes isn’t going to beat the market. This sounds obvious, but I have noticed that when people start investing, they are very focused on not losing money and will often put their money in companies that they believe are safe and won’t lose them money. Thing is, if that stock doesn’t beat the market, then they shouldn’t have bought it since they could have just bought the market itself. With this in mind, the question then becomes: how do I find stocks that can beat the market?

There are multiple ways that I find stocks. I try to find stocks that are trading at a reasonable premium relative to their earnings, are growing year over year, and aren’t in a bad amount of debt relative to their assets. This is the criteria for stocks that I am willing to buy. I believe that stocks that do these things will beat the market. Now, how do I find these?

Unfortunately, I’ve never been able to find a full list of market beating stocks. I’ve had to find stocks on other lists and compare them to my investment criteria. It doesn’t happen often. My strategy has always been to just find tickers and look at their numbers to see if they fit. There are stock research companies out there like, for instance, Zacks. They put out research on tons of stocks, and I try to take those tickers and compare them to my investing criteria. Most, of course, don’t fit, so I don’t buy. Every now and then, however, I find one that does, and I buy it.

Another thing that I do is look in funds. I can see what stocks funds are buying, so I will take those stocks and look at their numbers to see if they fit my investing criteria. Again, it takes a long time to find a stock that fits what I’m looking for, but when I do, I buy it.

I think the important thing to do is to make a list of characteristics you want your investments to have. After that, study as many tickers as you can to try to find stocks matching those characteristics.

Another thing one can do is enter their email down below as I write about a bunch of tickers.

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