The Stock Investor’s Pocket Calculator simplifies the math behind successful equity investing. Containing over 100 ratios and formulas, the book translates them into plain English, breaks them down into simple steps, and places them side-by-side with practical examples. Readers will learn how to judge portfolio value, assess corporate strength or weakness (both cash flow and profitability), follow revenue and earnings trends and more.
Introduction:
This book is designed for a spectrum of investors, from novices to seasoned professionals. Its purpose is to summarize in a single text the limited number of calculations everyone needs to be a better-informed investor. This involves three broad areas where calcula-tions need to be made. First is the basic investment calculation in-volving your portfolio, the computation of yield and return you need to make in order to judge your success. Because you hold invest-ments for varying amounts of time, it is essential to develop a method of uniformity, so that your calculations are truly comparable and consistent.
Second is the range of calculations used by corpora-tions in computing their profitability, cash flow, and use of capital. As an investor, you need to understand these calculations so that you will be able to track corporate reporting and outcome of opera-tions. Third is a broad range of stock analysis,which isthemeans for picking one company over another. This occurs in two separate ways, involving fundamental analysis and technical analysis. The fundamentals are the financial reports and the study of them, and technicalanalysisinvolvesastudyofastock’sprice trends.
This book is set up to break down the many calculations every investor needs into logical chapters and to then present information in context. Most people will agree that investment success is more likely to occur when your information is sound. Not only do you need solid information to know when or if to buy or sell; you also need to utilize intelligent formulas and tests in order to make in-formed judgments.
Contents:
- The Basic Dollars and Cents Problem: Overcoming the Numbers
- Rates of Return on Investment: What Goes In, What Comes Out
- Returns on Capital: Putting Cash to Work
- Leverage and Risk Analysis: Maximizing Other People’s Money
- Long-Term Trends: Patience Rewarded
- Core Earnings and Net Worth Adjustments: Making the Numbers Real
- Fundamentals: Balance Sheet Tests You Need to Know
- Fundamentals: Operating Statement Tests You Need to Know
- Technicals: Price and Volume Calculations
- Combined Testing: Merging Price and Financial Tests
- Taxation of Investments: Uncle Sam’s Share
