Dalal Street loves Profit and Loss statement because that where one finds all the metrics such as quarterly revenue, EPS, EBIT, EBITDA and margins. Therefore, Profit and Loss statement should be the most important financial statement. Nope!
I believe the most important financial statement is the cash flow statement. Unfortunately, it does not get a same level of attention as given to income statement. The reason analysts look at revenue, EPS, EBIT, EBITDA and margins, is that they are trying to estimate a cash flow number for future. They attempt to deduce the future cash flow. While I do believe that all three statements have its own reason to exists, it is the cash flow statement that is the true reflection of the current state of companies business. Continue reading rest of this article…
TIP Guy
28 March 2009
admin
It has been just over one month since I started actively posting on The Income Portfolio (TIP) Blog. It is a very short time frame, but it feels like I have been doing this for a long time.
So far…
I started slowly with about one post in a week. In the third week, I got hooked and started posting more frequently. I did not have much content on my blog spot and hence, there was practically no traffic and subscriber list was empty. Continue reading rest of this article…
Many times on this blog, I have mentioned that my investing style is very much objective driven. I tend to follow the systemic approach. Whenever I think about my investments, I tend to look at from the full portfolio investments perspective. In addition, I also believe in continuous evolution, and hence I make changes as I learn more about any aspects of investing. Readers of this blog will find that I do not talk about mutual funds. That’s because I am not a fan a mutual funds.
In this post, I am providing an overview of my investment buckets. These buckets address my long term investment risk profile for 10+ years and beyond. This description is not related to asset allocation or diversification. The graphic below provides an schematic for overall perspective. Continue reading rest of this article…
Commodity Asset Class in Dividend Portfolio
One of basic tenets of portfolio construction is following the principles of asset allocation. This is much more applicable and valid for do-it-yourself individual investors. In this context, at a minimum, I need to look at and at least consider evaluating all possible asset classes. While doing this, I also have to keep in mind that my portfolio is based on dividend growth philosophy. Among others, a commodity is also one asset class which I believe I should be investing. The next question is what should be my investing vehicle?
In recent years, commodity has been in news due to continuous increase in market price. This price increase was not restricted to any one particular commodity, but just manifested itself to all types of commodities. Commodities include agriculture products (grains, oil seeds, fertilizers, pesticides), bullion (gold, silver, platinum), Oil and related products (crude oil, natural gas), chemicals and petrochemicals (additives, fibers, yarns, paints, polymers), Metals (iron, steel, aluminum, zinc, etc). So you see it is indeed a very large domain. Now what does it really mean to trade or invest in commodities? It does not mean we buy or sell or invest in real physical commodity. Continue reading rest of this article…