Value Investing Why do investors hold cash positions instead of etfs? |
- Why do investors hold cash positions instead of etfs?
- I made a free API for discount rate estimation using data from prof. Damadoran and others
- Accounting Question - Loan Impairments
- Question on consumer finance company non cash expenses
- Thoughts on $FRAN?
- Need help valuing cyclical companies?
| Why do investors hold cash positions instead of etfs? Posted: 06 Jan 2018 03:43 AM PST I get that they believe that no stock-positions often = an expensive market. But shouldn't it historically be better to hold etfs following the broad index rather than having the positions in cash? Because, after all, how many times are investors actually correct in the fact that the market is expensive and is doomed for a correction? All investors know that timing the market is fairly impossible and thus holding etfs should be better than cash positions even though singular stocks seem expensive and unattractive. Not sure if what I'm saying just sounds like potato, but would really appreciate some insight in this topic. [link] [comments]  |
| I made a free API for discount rate estimation using data from prof. Damadoran and others Posted: 05 Jan 2018 12:22 PM PST I was a little tired of looking up bond yields and betas for discount rate estimations, so I have deployed an API with automatically updated data. Feel free to use it or modify it! Some interesting endpoints: https://api.quickfinstats.com/bondYields https://api.quickfinstats.com/currencyRates https://api.quickfinstats.com/equityRiskPremiums?country=United%20States You can check the full list of endpoints here: https://github.com/Jabors/financial-data-damodaran/tree/master/api And here is a simple interactive visualization tool: https://jabors.github.io/financial-data-damodaran-plots/ I plan to add more functionality in the future. If anyone wants to contribute, let me know! [link] [comments]  |
| Accounting Question - Loan Impairments Posted: 05 Jan 2018 08:06 PM PST So I'm in the process of digging into an Australian company - Cash Converters - that derives a significant portion of it's revenues from the provision of loans to the underbanked. Inevitably there is a fairly high delinquency rate and this is what I am trying to dig into. The difficulty I am having, and I believe this is almost entirely an accounting question, is how the bad debt expense and impairment losses are aligned between the income statement and balance sheet. From what I've read so far, the bad debt expense should = the impairments losses recognised (I.E estimated), with the actual (cash) adjustments occurring via the sums being written off. However this doesn't appear to be the case, so can someone please explain why the Bad Debt Expense and the Impairment Recognised figures do not match? All the figures have been taken from ARs. And given that bad debt expense has, cumulatively speaking, far exceeded the sums written off, where has the difference gone as it surely would have had to show up in the cash flow statement? Any help would be greatly appreciated! (Image attached for reference) [link] [comments]  |
| Question on consumer finance company non cash expenses Posted: 05 Jan 2018 10:00 PM PST I'm trying to understand the yearly cash flow on a consumer finance company. It is a small, private company. It's largest expense (around 40% of revs) shows up at the end of each year as bad loans/charge offs. These are loans that go bad over time anday have been written years before. Loans are typically less than 36 months. So for example, if a loan is written in 2015 and then the customer stops paying in 2017, it goes into the charge off bucket. And that expense is charges against 2017 revenue. In trying to calculate cash flow, would it be accurate to add back some of those charge offs since it was not an actual cash outflow in 2017? Obviously I'm an accounting novice. :) Any insight is much appreciated! [link] [comments]  |
| Posted: 05 Jan 2018 10:55 AM PST Francesca's has taken a beating over the past year and dropped an additional ~20% today after lowering Q4 2017 guidance. Here's what I like about the company...
They've been crushed because of declining revenue/earnings in 2017. Amazon obviously plays a role in the stock's decline as well as people are assuming brick and mortar retail has no future. Their company headquarters is in Houston, TX and Hurricane Harvey shut them down for a solid 2 weeks in Q3 (including their E-commerce distribution). There has been high turnover in management over the years and they seem to be having difficulty with their product line this year. I do like the current CEO though. He seems very honest about the situation and is accepting blame for the company's failures. I really like that he is consolidating the store's product line in order to focus more on their core customer (women in their 20s). I think it's dangerous when companies try to do "too much" and I think Francesca's has had that mistake, but they seem to be on a path to fixing that. So I just wanted to get everyone's opinion on this company. Is this still a good value play, or is it a value trap? Disclaimer: I am long $FRAN and bought more today [link] [comments]  |
| Need help valuing cyclical companies? Posted: 05 Jan 2018 08:27 AM PST I have recently had luck investing in the auto industry. Does any know of any good books to read that cover how to invest in cyclical companies? Mainly how to distinguish between value stocks and value traps. I think cyclical stocks can be an area of consistent return with the right resources. Any help would be greatly appreciated. [link] [comments]  |
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