selecting broad index funds / ETFs:
LF Global has 0.2% fee
traditional fund might be better for monthly investment since the ETF charges a brokerage fee (courtage)
Avanza has "Vanguard S&P 500 UCITS ETF USD Dis" (VUSA) which paids 1% and roughly follows "LF Global"
it might be faster to exit an ETF compared to a traditional fund (note: this might be a bad thing)
watch out for currency exchange fees
SCHG has better returns than "LF global", no fee and is quicker to sell
18MF is high return, high vol
short-term liquidity funds:
- SEB Korträntefond C USD – Lux
- UBS (Lux) Money Market CHF P-acc
- Swedbank Robur Räntefond Kort A
index with leverage funds:
unbuyable high leverage (will typically not be close to 3x the index after 1x increase because of the volatility of the underlying indexes):
TQQQ 3x leverage on NASDAQ-100
TNA 3x leverage on Russel 3000
trading view for prices combined with indicators like employee count, revenue, PE ratios etc
tikr.com has detailed financial statements with long history (i.e. see 20 year history for "stock-based compensation" item from cash flow statement etc)
finchat
qualtrim
earnings calls: https://earningscall.biz/e/nyse/s/ma
insider trade stats: https://www.gurufocus.com/stock/MA/insider
for tradingview symbols/info, see tradingview notes
metrics:
- Free Cash Flow Yield: for 1.23% FCF-yield, if you buy $100 of stock they could potentially (but might not) give you $1.23 in buybacks/dividends
- "return of capital" (not the same as "return ON capital") is the sum of buybacks + dividends
- EPS CAGR above >12% is nice
- a company with 10% CAGR on net income can still have 15% EPS CAGR if they are also doing buybacks
- GAAP metric that companies MUST include are for example:
- IS: Revenue, COGS, gross profit, Operating Expenses (SG&A, R&D), EBIT, Interest Expense, Income Tax Expense, Net Income, Diluted EPS
- BS Assets: Cash/CashEquiv, Accounts Receivable, Inventory, Property, Plant & Equipment
- BS Liabilities: Accounts Payable, Short/Long-term Debt
- BS Equity: Common Stock, Retained Earnings, Shareholders Equity
- CFS: Operating Cash Flow, Investing Cash Flow (CapEx and asset sales), Financing Cash Flow,
- RoE = Return on Equity = Net Income / Shareholders Equity
- ROCE = Return on Capital Employed = EBIT / (Assets - Current Liabilities)
- ROIC = NOPAT / "Invested Capital"
- NOPAT = Net Operating Profit After Tax
- Total Capital Employed = Debt + Equity
Similar metrics:
- Return of Capital
- Return on Capital = there is a range of different "return on capital" metrics but they all (in some form) take "what the company earned" and divides it by "how much was invested". Specific examples of ROC metrics include: RoE, ROCE
Net Operating Profit After Tax (NOPAT) divided by "Total Capital Employed"
- Return on Invested Capital = NOPAT / "Invested Capital" where "Invested Capital" = "Total Debt + Equity - Non-Operating Cash"
If a compaby has a pile of cash and it takes half of it and makes a GREAT investment, then their ROIC will be GREAT, but their "Return on Capital" (ROC) won't be as good because the ROC also considers the fact that half the money stayed non-invested.
- IRR is often used in venture capital, private equity and real estate because cash flows happen at irregular intervals. For public stocks is more common that CAGR works well. IRR has the problem that the same rate (irr) ends up being used for discounting both the positive and negative cashflows, so for cases where there are multiple positive cashflows over time you often get
an usually high rate on those positive cashflows. In reality, you might not have projects available such that those positive
cashflows can be invested with such a high return. Instead, it might be more realistic to use a more modest discount rate
when you compute the positive terminal cash flow. In general, these problems are fixed by using MIRR() instead of IRR().
why metrics are good/bad:
- P/E ratio looks really high if a company is suppressing net income (earnings) by heavily investing in expansion
- increasing net income can still be very bad if the company is diluting heavily via stock-based compensation
- EPS is based on net income which can be tweaked by scheduling taxes/depreciation/amortization in a certain way
- EPS growing doesn't necessarily mean that the management team is doing a good job, they might have gotten access to a
lot of capital and then it's natural to expect higher EPS even if the management team just kept doing the same things
they have always done. It's more important that the company has a good "Return on Capital".
Explained here: https://www.youtube.com/watch?v=VDkyGO5PWDg&t=1m6s
- FCF/share
tradeoffs:
- buyback vs dividends have different tax impact. Buybacks increase the value of the stock so the capital gain tax when the stocks are sold will be higher, but that capital gains tax is also paid much later once the stock is sold, whereas you might need to pay taxes on the dividend
right away. If the stock is sold many many years into the future, perhaps capital gains tax will be changed to be lower/higher by then? This also depends on what kind of trading account you have (i.e. ISK vs AF etc).
things to consider before buying a stock:
- is it a good stock?
- read annual reports to understand the business idea and scope of the company
- hands on research: is the products good? good reviews? long waitlist?
- does the stock have good growth prospects and/or high free cash flow
- is the stock being diluted or are they doing buybacks?
- recession risk?
- how much debt compared to cash?
- specific factors to examine based on what type of company it is:
- for example, if it's a retailer or restaurant; are they growing sales at each store/restaurant or are they growing primarily by opening LOTS of new stores/restaurants?
- is the stock reasonably priced right now?
- what's P/E compared to SP500 P/E ?
- what's the P/E compared to the P/E history for this company?
important concepts:
- is it more important to have a good sharpe ratio or to maximize return?