Evaluating Investments
Not all investments are created equal, and knowing how to evaluate them is what separates informed investors from hopeful ones. These articles walk through the frameworks and metrics used to assess stocks, bonds, funds, and other assets — from P/E ratios and credit ratings to expense ratios and risk-adjusted returns.
Scenario Analysis for Revenue Drivers
Single-point revenue forecasts miss by 25% on average. Scenario analysis decomposes revenue into 3-5 explicit drivers, assigns probability-weighted bear/base/bull outcomes, and models driver correlations -- cutting valuation error by 23% and narrowing confidence intervals by 40%.
Cash Flow Statement Signals Investors Should Watch
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Documenting a Thesis and Monitoring Triggers
Most investors can tell you why they bought a stock. Almost none can show you the written record proving it. The result: positions drift from their original rationale, kill criteria never get defin...
Growth Metrics: Revenue CAGR, Same-Store Sales
Investors routinely overpay for growth — or miss it entirely — because they confuse total revenue increases with sustainable expansion. A company reports "record revenue" while its existing locatio...
Using 10-Ks, 10-Qs, and 8-Ks Effectively
Most investors buy stocks based on earnings headlines, analyst ratings, or what's trending on social media—then wonder why they're blindsided by restatements, impairments, and executive departures ...
Analyzing Expense Ratios and Fund Costs
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Valuation Multiples Overview: P/E, EV/EBITDA, P/S
Valuation multiples are the first thing most investors check—and the first thing most investors misuse. The pattern: you screen for "cheap" stocks by P/E alone, compare a utility to a software comp...
Moats and Competitive Advantage Frameworks
Investors consistently overpay for companies they *assume* have durable advantages—buying "quality" without measuring whether the advantage actually shows up in the numbers. A Morgan Stanley study ...
Profitability Ratios: Margins, ROE, ROIC
Most investors glance at a company's earnings and call it "profitable." But a company can report positive net income while destroying shareholder value—if its return on invested capital sits below ...
Checklist for Evaluating Investment Newsletters
Investors subscribe to newsletters expecting an edge—then rarely verify whether that edge exists. The SEC filed 583 enforcement actions in fiscal year 2024 alone, returning $345 million to harmed i...
How to Vet Financial Data Sources
Most investors never question where their numbers come from—and it costs them. You pull a P/E ratio from a free finance site, plug it into a spreadsheet, and make a buy decision based on data that ...
Balance Sheet Strength Indicators
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Reading Income Statements for Key Trends
Most investors glance at earnings-per-share, decide "beat" or "miss," and move on. That's like checking your blood pressure once and ignoring the trend line. The income statement tells you where pr...
Red Flags in Promotional Investor Decks
Promotional investor decks that mislead cost real money—Theranos raised $700 million from investors using presentations that falsely claimed its blood analyzer could run comprehensive tests from a ...
Qualitative Factors: Management and Governance
Weak governance destroys portfolios in ways that financial statements never warn you about. WorldCom's board—stacked with associates of CEO Bernie Ebbers, lacking independent directors—enabled $11 ...
Comparing ETF Tracking Difference and Error
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Credit Ratings and Outlooks Explained
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Dividend Sustainability Checks
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Building a Simple Valuation Model in a Spreadsheet
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