Sign Up For The Next
New Constructs Webinar






Navigation

Energy Sector

Thursday, August 28th, 2014 BW Final-3rd

The Energy sector ranks eighth out of the ten sectors as detailed in my Sector Rankings for ETFs and Mutual Funds report.

Read More

Discontinued Operations – Valuation Adjustment

Friday, August 23rd, 2013 Discontinued_Figure1

There is one last adjustment we must make involving discontinued operations: adding net assets from discontinued operations to shareholder value. Because discontinued operations are parts of a company being held for sale, the value of the net assets from these discontinued operations approximate the cash the company will receive from the sale. This cash will then be available for distribution to shareholders.

Read More

Deferred Tax Assets and Liabilities – Invested Capital Adjustment

Friday, August 2nd, 2013 dtaal1

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).

Read More

Asset Write-Downs – Invested Capital Adjustment

Monday, July 22nd, 2013 AWDF1

For debt investors, which GAAP was primarily designed for, write-downs are analytically helpful. They provide a more accurate assessment of the liquidation value of a company’s assets. For equity investors, on the other hand, write-downs are not helpful because they distort the return on invested capital (ROIC) of a company.

Read More

Discontinued Operations Removed from Invested Capital – Invested Capital Adjustment

Tuesday, July 9th, 2013 DiscontinuedOperations

Most investors would never know that discontinued operations distort GAAP numbers by over-stating assets on balance sheets and distorting the picture of a company’s ability to generate a return on that capital.

Read More

How To Survive the Euro Crisis

Tuesday, June 26th, 2012 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.

Read More

Low-Cost Funds Dupe Investors

Wednesday, May 9th, 2012 DupeFig1

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.

Read More

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

Monday, April 30th, 2012 AllCapBlendFig2

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

Read More

Forensic Accounting Says Avoid Energy & Financial Stocks

Tuesday, November 15th, 2011 Figure1

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.

Read More