August 2011 Webinar: Portfolio Strategy
Preferred Procedure - Or Is It?
Dropbox: Data at Your Fingertips
InvestEd Inc. Free Webinar: Portfolio Strategy
Sunday, August 28, 2011, 9 PM -10 PM ET/6 PM -7 PM PT
Instructor: Matt Willms
Concentrated Positions: The Elephant in the Room
Do you find it difficult to manage your investment portfolio around one or more concentrated positions?
Concentrated positions representing a disproportionate percentage in a portfolio leave that portfolio with a higher degree of risk. Many times, an over-weighted position will have a very low tax basis, making an outright sale of the security difficult from a tax perspective. In addition, strong emotional attachments may be associated with the holding. For these reasons, many investors choose to ignore the elephant(s) in the room, hoping the rest of their portfolio will perform effectively.
Reasons to Attend the Webinar
- Learn how to manage concentrated positions
- Understand reasons to prevent the buildup
- Gain insight into tax consequences
- Check your rebalancing steps against Matt's
- Receive answers to your questions from an established expert
to attend this online investor education session. Space is limited.
Matt Willms is president of QUANT IX SOFTWARE Inc.
, the company that develops the Investment Account Manager
software for investment record keeping and portfolio management for individual investors. He is an InvestEd
instructor who has been involved in the securities and investment business for over 20 years. Matt earned a BS degree from the University of Wisconsin-LaCrosse and an MBA from the University of Wisconsin-Milwaukee. He has an Investment Advisor Representative license from the State of Wisconsin. In 1985, Matt formed QUANTIX SOFTWARE Inc. to develop investment management and record keeping software.
quickly for the FREE webinar.
Preferred Procedure - Or Is It?
Part 1 of 2
By Saul Seinberg
Investors using Toolkit or similar software to analyze stocks have a choice in deciding how they will project future earnings growth in completing a stock study. The most often used earnings projection is a straightforward estimate based on the historical growth of earnings per share (EPS), adjusted by the user to accommodate analyst projections and/or current and recent events. These adjustments are at the discretion of the investor and serve to temper history with current knowledge of what the future might bring.
Those who use the historically-based EPS method are making an assumption, whether or not that assumption is fully appreciated, that past company metrics, such as tax rates, expenses, and shares outstanding, will remain essentially the same over the next five years or that such changes will balance out. More on this later.
The other approach to estimating a company's future earnings involves use of the Preferred Procedure, also known as Revenue-based EPS Estimate in Toolkit 6 stock study software. I have heard several explanations of why the Preferred Procedure is preferred, but I have never heard one that satisfies me. Here is my take on the Preferred Procedure. Let's start by looking at what the Preferred Procedure is and how it works.
The Preferred Procedure is a process by which an investor creates a five year forward looking income statement for a company by projecting its sales, expenses, taxes, preferred dividends, and shares outstanding to determine EPS in that future income statement.
The arithmetic is simple: sales minus expenses yields pre-tax profit. Pre-tax profit minus taxes and minus preferred dividends is divided by shares outstanding to determine EPS. That result is translated into percentage growth and entered into the box for earnings growth at the bottom of Section 1.
All of this seems fairly straightforward, but you must have noticed that the Preferred Procedure requires an investor to estimate or project five different items versus just one for the historically-based EPS projection. Thus, while the math may be simple, determining these projections is not a trivial exercise. It takes extra time.
In my opinion, the most difficult item to project in the Preferred Procedure is sales. This projection is no more difficult conceptually than estimating historical EPS, but it is harder because less attention is paid to sales than to EPS.
My experience indicates that EPS estimates for more than two years are more common and more available than similar estimates for sales. Like it or not, correct or not, we invest in an EPS-centric world. Projecting earnings for your stock study on a historical basis is far easier and no less correct.
Part 2 of the article will be continued in the September 2011 InvestEd Inc. Monthly Newsletter.
Saul Seinberg is an InvestEd
instructor, presents InvestEd Inc. free online webinars, and is an associate director of the corporation. He is vice president of the online CGAB Alumni Investment Club. With degrees in electrical engineering and law, Saul spent most of his career as a corporate attorney.
Dropbox: Data at Your Fingertips
By Lynn Ostrem email@example.com
When I was asked to provide a technology tip for this newsletter, I thought to myself, "You've got to be kidding!" I can barely navigate the features on my new cell phone.
While I may not be proficient with the latest mobile devices (or Facebook, for that matter), I am organized to a fault. And to that end, Dropbox.com is one of the most important tools in my arsenal.
Dropbox is an offsite storage website. You download it onto your computers and mobile devices, and it operates as an additional documents folder. You can fill it with all types of files. Storage up to 2 GB is free. Additional storage is available for a fee.
When you save a file to your Dropbox folder, it automatically is saved to your offsite Dropbox folder and sent to your other devices. If you are not currently connected to the Internet, it will be sent the moment you connect. Read about Dropbox features
, and see the Dropbox short video tour
I create client files that take several weeks to complete. Before Dropbox, if I wanted to take them "on the road," I would have to save them to a thumb drive or email them to myself in order to get them from my desktop PC to my laptop. Oftentimes, I would discover I had duplicate files, and I'd lose valuable time trying to determine which one was the latest version. Or worse, I would corrupt a file in transit and have to re-create it from scratch. Ugh!
With Dropbox, I simply save the file and then pull it up on my laptop from any coffee shop, client location, or even at the campground (where I've been known to clock a few hours on work projects). Even if I am somewhere without WiFi, I still can work on the latest version of my files offline, provided I previously connected to the Internet in order to update the device I plan to use offline.
If I mess up a file, it's no problem. Dropbox keeps a copy of the previous version just for this purpose. It also is a safe place to park my final InvestEd presentations and handouts temporarily in the event my thumb drive fails or I lose it. And, it provides me with a public folder where I can share files with other people.
Dropbox is not the only storage website out there, but it's easy to use and it's never let me down.
Lynn Ostrem is an InvestEd instructor who formerly served the BetterInvesting Minnesota and Central Iowa chapters by developing and teaching classes. She founded three investment clubs including the nationally known Crow River Investment Club
where she is the current president. Through the website, Lynn has mentored over 100 club start-ups, and she has been instrumental in bringing independent investor education events to the Minneapolis/St. Paul area. When she's not working on preparing and teaching classes, Lynn operates a consulting firm that specializes in reducing costs for manufacturing facilities.
InvestEd 2012 in Charlotte NC
June 8-10, 2012
Renaissance Charlotte Suites Hotel
"Thank you for InvestEd 2011. I was really touched by the generosity, hard work, thought, tough decisions, planning, organization, and love that went into this event. I could feel it in the classrooms, halls, and dining room. I enthusiastically plan to attend InvestEd 2012 in Charlotte."
- Etana Finkler, Silver Spring, Maryland
While the InvestEd team is creating a dynamic 2012 conference curriculum, we invite you to visit the InvestEd 2012 tourism page
, and explore the wide variety of activities in the greater Charlotte area. Adults and young people will find entertainment that appeals to history buffs, outdoor enthusiasts, museum attendees, music lovers, sports fans, and much more. Shopping and restaurant choices are abundant.
Early Registration Savings, $25 Rebate Offer, and Guest Room Discount
Early InvestEd 2012 registration
is $369 and includes all conference activities, including five meals: breakfast and lunch on Saturday and Sunday plus dinner on Saturday. Full-time students with a valid school identification card pay $359.
Attend InvestEd 2012 and receive a $25 referral rebate when you bring friends or family members who did not attend InvestEd 2011. Referrals must provide your name when they register, and you both must attend InvestEd 2012. After the conference, you will receive a $25 rebate for each person you refer who attended the conference. Spread the word about the InvestEd brand of quality investor education, please your friends, and rack up your rebates.
InvestEd attendees pay only $109 plus tax for a standard suite in the InvestEd room block at the Renaissance Charlotte Suites Hotel
. Rooms in the block receive free Internet access, a $12.95 savings. Hotel parking is free. A limited number of rooms are available.
Super-charge your investing resolve and expand your skills in Charlotte. Make your registration reservation early, and plan to meet-up with other investors at InvestEd 2012 for Investor Education at Its Best.
Questions? Contact InvestEd
InvestEd Inc., a 501(c)(3) non-profit corporation, produces the InvestEd conference.
InvestEd 2012 conference
P.O. Box 301
Slingerlands NY 12159-0301