Depression – Part 2

As I promised, but later than I wished for, here is the follow up. “The pickle” with all my advices, the most important, the critical aspect I left for now. Nothing is worth a dime without the most important one of all –WILL/DETERMINATION. And, hey, that is exactly where depression attacks – the WILL. Most of us, let’s be honest, are lacking this in the best of times.

Continue Reading

Investing DIY – 5 – More details about stock evaluation

I thought I should capture some economic indicators that can help you make an informed decision when buying stock. These indicators and theory can be found in many places but it’s easier if they are in the same place, eh?! None of these indicators are an ultimate factor but each gives you a picture of a company – the more positive findings, the better the investment. These are the ones I used but each investment school thinks some others are more important. It might be so but one needs to walk before running.

Indicators to identify a bargain stock

  • P/E (Price/Earnings) Ratio – I discussed it before. A good investment has a lower/much lower P/E than its competitors/sector/industry. It shows how quickly, keeping up the earnings the same, the stock will be paid off from these earnings. A company with a P/E of 30 but with a 80% annual growth for the last 3 years most probably is a much better investment than one with a P/E of 25 but with 20% annual growth. Rule of thumb is that one should be very cautious with companies with P/E over 30-40 (they might still be a very good investment but please check carefully)
  • Price-to-book Ratio – How much the company is valuated on the market compared with the declared assets. A Price-to-book below 1 seems like a real bargain (in theory, if the company would be liquidated, you would get more money than if you were to sell your share on the stock market)… but be wary! Corroborate with all the other aspects, with its competitors/industry to find out WHY it is so undervalued. Below 2 should be still be fine.
  • Price-to-sales Ratio – Share price divided by revenues per share. It is useful when evaluating how quickly the company is growing and how fast it is growing its sales/revenues. Smaller is better – useful when comparing companies in the same sector. A company might be growing very fast, becoming quickly competitive, yet it did not attract yet the attention of the analysts, investors.

Financial Strenght (debt evaluation)

  • Quick Ratio – this is a quick look at the cash flow, the power of the company to cover its short-term debts with the money it generates. Above 2 is a sign of financial strength.
  • Debt-to-Equity Ratio – Total liabilities divided by equity of the shareholders. A high ratio here means the company is financing its growth by borrowing and that the growth would not be sustainable in time. (Sort of a person taking 10K from a line of credit and then bragging “I have 10K all the time in my chequing account”). It should be checked within the industry range. Capital intensive industries might have such a ratio as high as 2, while others have a normal range of below 0.5. Should be looking for those below 0.5.
  • Dividend Payout Ratio – This is the yield (money paid out) vs earnings per share. When we chose a company for the reason it pays dividends, we want to make sure they will continue to pay those dividends. Remember – dividends can be suspended at any time. Beside the length of time the company has a solid dividend paying record. Each recommends a different threshold – some people recommend a ratio of below 50%, others like it to be a little big bigger (70-80%), because it means the management is committed to having performance of the company high. In any case, any dividend payout ratio over 80-90% is a red flag. There are companies paying over 100% but, in long term, that is not sustainable (they pay more than they earn). Mind you – some investments – like REITs – are forced, by law, to distribute more than 90% of their income to investors, so it is ok in those cases to have a payout ratio of (let’s say) 95%.


Earnings-per-share, Sales, Dividend Growth Rates – all these, when compared to the competition/industry average, show how fast the company is growing. A company with traditionally not so good indicators – which makes it stay below the analysts’ radar – but with low debt and big growth in the late 1-2 years – might allow you to be an early investor in a success story.


Beta – discussed before. It is an indicator of price change. Not so important in economic terms but important for your risk-tolerance. The higher the Beta, the more the price of the shares fluctuates. If you are easily unnerved, avoid anything above 1.


There are many other indicators for the solidity of a company. Some are composite indicators I.e. GER Analysis is another composite indicator which combines some of these indicators and some others: P/E, Debt-to-Equity, Return-to-Equity, Price-to-Earnings-vs-Growth, Growth rates, Earnings-per-share, Revenues to provide a composite number 0 (weak) – 100 (strong).


For a very long time I wished to be good… and that strong desire made me become bad many times. I would speak my mind – giving many times “cutting” opinions, made people feel bad and then feel bad about myself for pointing them what their inner self tells them too but don’t want to admit. Feeling bad about yourself is the sure way of behaving nasty toward the others. What is worse is that while in time I learned to be more diplomat with people I don’t care much how they live their life, I kept on giving my truth to people dear or close to me, the ones with a future I perceived intertwined with mine. In other words I scold only the people I care for, just like I scold myself.
No, I am not a good person. Not in this definition: telling people what they want and what they need to hear. I do good deeds – many times I was told that too much out of my way to help people, even to get away from their own mistakes, but I can’t help telling them what they did wrong. And that is wrong – because people know what they did wrong, they know why their lives are not what they want them to be. They simply would not admit it. And that is why attending lifestyle-gurus conferences don’t make one bit of a difference – people don’t need to be told what is wrong, they just need will to fix what they are doing wrong. Unfortunately, I am so impatient that I keep on forgetting that one is never a prophet in his/her own country and I believe that a simple demonstration would (as it should) be taken for what it’s worth.
People spend too much and then complain publicly about the state of their finances. Do you think they need to hear me pointing out the errors of their budget (or lack of)?! People make wrong emotional choices – hanging on too long on a destructive relationship… do you think it makes any difference if I point out the futility of expectation of love and care where it didn’t happen in 1-2-3 years?!
I remember how angry it made me when my ex told me that she is with a man who is “good”. It seemed so unfair! He paid for 2-3 dinners, told her that she is the most beautiful, accomplished woman he ever knew and had become good. I, on the other hand, to consider only the Canadian period, sustained her financially for 4-5 years. But during this time I told her what I considered is wrong: that taking Computer Science during the layoffs in the technology sector is dumb, then she should chose the stable job, not the exciting one… and unfortunately I was accurate as a soothsayer and she resented me for this. I pushed her to make a credit history, a driver license, forced her to become autonomous so in case of my death, she could continue to be on her feet and take care of Gabriel. That is why I became “mean” and a stranger who didn’t help in any way in her becoming was “good”.
No, I am not a good person. I am just like a horrible Jiminy The Cricket… the voice of conscience, telling people “That is wrong “… but they already know it and just do what they were programmed to do. In the end I resent myself too because I think I am a complete idiot expecting the pig to fly, the eagle to dig the soil, the chicken to kill and so on. What I build with dedication and hard work, I destroy in a moment with my damn mouth.