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Diligence Institute

Highlights From New Constructs Investment Research

Deferred Tax Assets and Liabilities – Invested Capital Adjustment

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DTAs artificially raise reported assets and do not help generate operating profit while DTLs are like a source of interest-free financing. We remove the impact of DTAs and DTLs from our calculation of invested capital to ensure the more accurate measure of a firm’s return on invested capital (ROIC).

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How To Survive the Euro Crisis

How To Survive the Euro Crisis

As I wrote in “Don’t Be Fooled: Get Short Now”, the euro is not that different from Enron, WorldCom or the Madoff fund. All of these organizations were able to pretend they were profitable or solvent long after they were insolvent.
Now markets are finally acknowledging the intractability of the Euro debacle.

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Low-Cost Funds Dupe Investors

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Fund holdings affect fund performance more than fees or past performance. A cheap fund is not necessarily a good fund.
Our research on holdings enables investors’ to find funds with high quality holdings – AND – low fees.

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Best & Worst ETFs and Mutual Funds: All-cap Blend

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The all-cap blend style ranks third out of the twelve fund styles as detailed in my style roadmap. It gets… Read more >>

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Forensic Accounting Says Avoid Energy & Financial Stocks

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As one financial scandal follows another, it seems the good guys are having a tougher time catching the bad guys. Recent revelations about MF Global’s ponzi scheme are another reminder of how our regulatory and oversight systems seem to let whales pass through their net.

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