InvestEd 2014: Irvine CA
March Webinar: Screening for Stocks with Value Line's Online Service
Utilize Relative Strength to Manage Portfolios: A Buy High, Sell Low
Strategy Part 1
Looking Good on Your Webcam Video
Irvine, CA June 6-8, 2014
This month we continue highlighting new InvestEd conference sessions. John Diercks and Daniel Rivera talk about their sessions.
John Diercks reviews changes in company structure in a new session entitled "Mergers, Acquisitions, and More."
Investors with stock portfolios are familiar with mergers, acquisitions, and spinoffs. Mergers and acquisitions result in company name changes and removal of companies from our portfolios. Spinoffs often litter our portfolios with small numbers of shares in little known companies.
Many investors fail to project or even consider the value of the combined companies in mergers and acquisitions or the value of the resulting companies in spinoffs. In fact, investors may benefit from evaluating these structural changes before and after they take place. Studies have shown that about two-thirds of large mergers and acquisitions disappoint investors and lose value. Another study found that less than 50 percent of parent and spinoff companies beat the market over a five-year period.
This session reviews the basics of mergers, acquisitions, and spinoffs. The good and bad of these structural changes will be illustrated with actual well-known examples of value-increasing and of disastrous company changes. Finally, a relatively new process called "drop downs" will be presented. Using this process, assets from a general partner are "dropped" to a Master Limited Partnership (MLP). The benefit of these financial transactions is that they may produce increased value for the investor by taking advantage of the tax structure of a MLP.
Daniel Rivera is InvestEd's own Google guru. He talks about his Google Drive sessions:
Google Drive is a service offered by Google. If you use Gmail, you automatically have Google Drive. You don't need to create a separate account. On Sunday morning, I will teach two sessions on Google Drive: a session designed especially for beginners and a session designed for those familiar with Google Drive. Come and learn about Drive's two main functions: a file hosting/syncing service with features very similar to Dropbox, and an online collaborative office suite with word processing, spreadsheet, presentation, and form capabilities. Google Drive is changing how we work on files, how we collaborate and share files, and how we store, access, and publish information. Don't miss this opportunity to learn to use Google Drive, where you will have access to your files anytime, anywhere.
Learn from John and Daniel and all the InvestEd instructors at InvestEd 2014 in Irvine. Review the InvestEd 2014 website and register to join us on June 6.
Early Bird Registration Rate Ends March 31, 2014
Early bird registration is $389. Registration cost effective April 1 is $409. Full-time students with a valid school identification card pay $359. You must register by March 31, 2014, to receive paper copies of session handouts. All attendees receive a CD of the handouts. Register now and save!
InvestEd Inc. Free Webinar
Screening for Stocks with Value Line's Online Service
Sunday, March 23, 2014
8:00 PM-9:00 PM ET / 5:00 PM-6:00 PM PT
Instructor: Sharon McAllister
Stock screening tools can help you quickly find stocks that fit your personal investment goals and strategies. This presentation will review underlying principles of stock screening and show you step-by-step how to build stock screens with Value Line's online screening tool. Learn how to become proficient at idea generation and discovery by customizing predefined screens and developing your own screening techniques.
Register now to attend the InvestEd Inc. free online investor education webinar. Space is limited.
Sharon developed InvestEd's online webinar education program. She contributes to two stock study groups within her community and has actively invested in the stock market for more than 30 years. She holds a BS in Computer Science/Accounting from the University of Central Oklahoma and an MBA from Oklahoma City University. Professionally, Sharon is a retired software developer who designed and developed domestic and European point of sale software solutions for a large car rental company. Her hobbies include drawing and painting, along with enjoying nature, hiking, reading, and gardening. She loves to travel and is interested in learning how history and geography shape people, cultures, and the world.
Utilize Relative Strength to Manage Portfolios: A Buy High, Sell Low Strategy
Wheat is the valuable. Chaff is the worthless. Separating the wheat from the chaff may sound easy. However, unless you have a tool to effectively and efficiently carry out the task, the separation process can be ineffective and produce undesirable results.
Just like simple, well-designed tools help harvest wheat, tools can help an investor harvest profits from the stock market. One of the most useful technical tools to use in trending markets is relative strength.
The relative strength tool compares price performance between two stocks, indices, or ETFs over time. By using relative strength to measure price performance relationships, you can make sure each holding in your portfolio outperforms the broad market, a market segment, or a sector. You can harvest profits from your portfolio when relative strength begins to weaken and then replace a weakening holding with a security that shows strong increasing relative strength. Relative strength helps you manage a portfolio and will assist you in separating market leaders from market laggards.
This three-part article shows you how you can explore a price relationship with the relative strength tool to drive your portfolio's profitability. If your aim is to beat market or sector returns, you need to hold stocks that are beating the market or their sector. Essentially, you want to be where money is flowing into a stock or ETF and performance is optimized for the better. Simple, yet robust, relative strength analysis helps separate good price performers from bad price performers. Relative strength is an important tool that provides investors with a measurement of price performance relationships.
Relative strength is calculated by dividing the price of one security into the price of another security to create a ratio. This result is then plotted on a graph. Relative strength, the comparative tool, is not to be confused with the Relative Strength Index (RSI). RSI is a different technical analysis indicator that evaluates the rate at which a stock's price has changed over time, whereas relative strength measures price performance relationships between two equities over time.
Think of relative strength as an arm wrestling contest that happens every day between two different stocks (or groups of stocks) to determine which stock (or group) is the one with stronger price performance.
Let us remember that every investor, hedge fund manager, and portfolio manager is trying to find outperforming stocks. A relative strength chart lets you measure and study price relationships in which economic factors are embedded. By monitoring movement and change in price relationship trends, you are able to gain powerful insights.
The slope of trend lines, which are drawn on relative strength lines, point to outperformance or underperformance. Remember, we're talking about a ratio in which two financial items are compared. When a relative strength trend line is rising, the numerator's stock price in that ratio is acting better than that of the denominator. When the relative strength line is falling, the numerator's stock price is acting worse than that of the denominator. When you use relative strength analysis to compare the price of a stock, ETF, or mutual fund to a broad market index, such as the S&P 500, you can determine which one has stronger price performance over the time period for which the ratio is being measured.
To achieve outperformance in a portfolio, you want to buy and hold high relative strength positions and sell weak relative strength positions. You examine price relationship trends by determining whether the slope of the relative strength trend line is rising or falling. Buy (or hold) when relative strength for an investment is high: i.e., the relative strength trend line is rising. Sell when relative strength for an investment is low: i.e., the relative strength trend line is falling.
Relative strength works because strong performance is not random. It reflects all the good and bad aspects of a company's performance, including its fundamentals. Companies and sectors that out-perform over a period of time tend to maintain characteristics that helped them achieve their high performance, and that is demonstrated in the charts. Relative strength charts can help you maintain a portfolio of strong performers because relative strength analysis facilitates strong portfolio performance when appropriately employed.
Part 2 of this article will continue the discussion and focus on using indexes with different attributes to your advantage.
Sharon developed InvestEd's online webinar education program. She contributes to two stock study groups within her community and has invested in the stock market for more than 30 years. She holds a BS in Computer Science/Accounting from the University of Central Oklahoma and an MBA from Oklahoma City University. Professionally, Sharon is a retired software developer who designed and developed domestic and European point of sale software solutions for a large car rental company. Her hobbies include drawing and painting, along with enjoying nature, hiking, reading, and gardening. She loves to travel and is interested in learning how history and geography shape people, cultures, and the world.
Looking Good on Your Webcam Video
An email from InvestEd instructor Mary Ann Davis gave me a good idea for a tech article about using webcams. Bill Myers, in one of his tips of the week, gives us a starting point. Myers' website contains a wide variety of information you may find interesting, in addition to his tips about using webcams. While the web tips are free, his other articles require joining the site and paying a fee.
If you plan to use your computer's webcam or a video camera to make a video for personal purposes or for the public, you can improve your chances of looking good by making some simple adjustments in lighting, background, and camera position. Myers includes several short videos on his website that illustrate his ideas for making a good video.
Fast Company, which identifies itself as "the world's leading progressive business media brand," shared an article written by Amber Mac that identifies three tips to help you look good on webcams. Using a good quality USB-powered microphone and an Ethernet connection, rather than WiFi, is an important first step. Your voice quality will sound professional, rather than like a do-it-yourself project.
Tip one from this article is to look up at the camera, rather than down at your screen. Your eye line is important in getting a good image, and angling your eyes downward, even if only slightly, is unflattering. Elevating your laptop so that you are looking up at the camera will bring about a much more attractive image on the viewer's screen.
Another tip is to light in front of you rather than in back of you. This may mean you want to face toward a window, rather than having the window at your back. If window light is not available, find a light you can place in front of you (behind the computer's webcam or behind the video camera).
A third tip is to purchase an external web camera. Such cameras are available at reasonable prices; you don't need the most expensive camera on the market. Computer cameras are fine for informal videos and talking with friends and family, but for a more professional looking video with a sharper picture, you may wish to use an external camera.
In an online video clip, photographer/director Matthew Rolston reinforces the suggestions above and adds some of his own, including framing your face on the computer screen. Freelance makeup artist Petra Kozina, in her YouTube video, talks about using appropriate makeup and looking natural for your video.
On the website Mashable are additional tips for making ourselves look good on a video. Demetra Kavadeles, Global Public Relations Manager, gives us some ways to trick the camera. In addition to lighting from behind the webcam and looking up at the webcam, she reminds us to be aware of our posture and to sit up straight. We also want to be aware of the clothes and jewelry we wear during our webcam experience and our general surroundings. For example, jewelry reflects light that may distract the viewer. Darker solid colors of clothing are best, as is a background that is uncluttered.
Other online articles and videos espouse suggestions to those above. Here's to looking good when on camera!
Sandy is an InvestEd Inc. director and serves as secretary. She is lead editor and prepares the general program brochure for the InvestEd conference. Sandy, an O'Hara Award recipient, is a charter member and the current president of a local investment club. She has helped form investment clubs, presented introductory investing programs, and taught stock study classes at local and regional events. Sandy is professor emeritus, Georgia Southern University.
Questions? Contact InvestEd
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