InvestEd 2015: Find Riches in Richmond
August 2014 Webinar: Options Part 2
What is This Thing Called GARP?
When Is Good
Richmond VA, June 12-14, 2015
Westin Richmond Hotel
Find Riches in Richmond
While the InvestEd team is creating the 2015 conference curriculum, we invite you to visit the conference tourism page and explore the wide variety of activities in the greater Richmond area. Adults and young people alike will find activities that appeal to history buffs, outdoor enthusiasts, museum attendees, music lovers, foodies, and more. The Richmond area is a vacation lover's delight.
Save Money! Early Registration, $25 Rebate Offer, and Guest Room Discount
Early bird InvestEd 2015 registration is $369 and includes all conference activities, including five full meals: breakfast and lunch on Saturday and Sunday plus dinner on Saturday. Full-time students with a valid school identification card who are under age 30 and are first time InvestEd attendees pay $259. Register now.
Attend InvestEd 2015 and receive a $25 referral rebate when you bring friends or family members who did not attend InvestEd 2014. A referral must provide your name when registering and both of you must attend InvestEd 2015. Student rate attendees are not eligible to be a referrer or a referee. After the 2015 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, encourage your friends to attend, and we'll put money in your pocket.
"The best bang for your bucks." -Teri G., InvestEd 2014 attendee
InvestEd attendees pay only $119 plus tax for a room in the InvestEd room block at the Westin Richmond. Rooms in the block include free guest room Internet access and free parking. Book your room early. A limited number of rooms are available.
Super charge your investing resolve and expand your investing skills in Richmond. Make your registration reservation early, and plan to join other investors at InvestEd 2015 for Investor Education at Its Best. Find your riches in Richmond!
InvestEd Inc. Free Webinar
Options Part 2
Sunday, August 24, 2014
8:00 PM-9:00 PM ET / 5:00 PM-6:00 PM PT
Instructor: Saul Seinberg
In July, Saul Seinberg began a series of five webinars to help investors with little or no option knowledge or experience get started with using options in their own investment efforts. In Part 1 of this series, Saul provided attendees with an introduction to options, the basics of derivatives, differences between options and stocks, option chains, Moneyness, the role of commissions, use of options, and buying and selling options. In this month's webinar, Saul discuses option analysis and basic strategies, option risk vs. stock risk, the Greeks, using probability, and selecting an underlying. The August webinar also may include topics added by July webinar attendees.
Register now to attend this InvestEd Inc. free online investor education webinar. Space is limited.
Saul is an InvestEd Inc. advisory director and a conference instructor. A former vice president for education of InvestEd, he teaches at local through national investor education events. With degrees in electrical engineering and law, Saul spent most of his career as a corporate attorney. In addition, he served as an adjunct professor at Albany Law School in New York.
What is This Thing Called GARP?
Are you familiar with the term GARP? Investors hear the term frequently, but just what does it mean? Should you be a GARP investor? Why might GARP be a concept important to you?
GARP, a term made popular by Peter Lynch of Magellan Fund fame, along with Mario Gabelli, and David Dreman, means growth at a reasonable price. This is an investing strategy that suggests we invest in stocks with both growth and value potential. Warren Buffett chimes in with his view that "growth and value are joined at the hip." Investors look for stocks with higher than average earnings growth and lower than average price to earnings ratios. In other words, they want stocks that are reasonably priced when compared to the overall market. Typically, companies displaying GARP characteristics have strong overall fundamentals. The investor's goal is to avoid the extremes of both growth and value.
Proponents of the GARP strategy, sometimes referred to as a hybrid strategy, believe stocks that fit this description will be able to sustain themselves better than other stocks during tough times. In general, during bear markets these stocks tend to outperform high growth stocks, but tend to underperform pure value stocks. Some may consider these stocks a bit boring, and often they do not receive a great amount of attention from financial analysts. Those who tend to favor GARP stocks are rather conservative long-term investors.
How is GARP calculated? The simple answer is: divide the current price to earnings ratio (PE) by the currently estimated annual growth rate of earnings per share (EPS). The result of this calculation produces a price to earnings to growth (PEG) ratio, which is the metric that calculates the balance between a given stock's value and its growth potential. The PEG ratio is a popular valuation tool used by investors to determine if the stock's price is appropriate for either a buy, hold, or a sell. A PEG ratio of 1.0 represents a fairly valued company. So, GARP investors look for PEG ratios under 1.0.
Many investors, especially those fairly new to investing, rely upon analyst consensus estimates (ACE) for projecting the annual EPS growth rate. Such estimates may be found at Yahoo. Type in your ticker symbol, and scroll down to Analysts Estimates. The Nasdaq website also includes earnings estimates. After inserting a ticker symbol, scroll to Analyst Research, then click on Forecast at the top of the page.
At Zacks, simply insert the ticker symbol in the appropriate space for a quote and scroll to Estimates. Many brokerage websites also include links to earnings estimates. An extensive article about estimating earnings is available at Seeking Alpha. Keep in mind that most, if not all, of the earnings estimates available include estimates from some of the same analysts. So, comparing a few sets of estimates makes sense, but using more than two or three consensus estimates produce redundant results.
Estimating the future price of a stock is the other part of the calculation for GARP. The Yahoo website includes the one-year target price for a stock you include in a portfolio (assuming you check that as an option). After setting up a portfolio, click on Custom View, and select the options you want to see on your computer screen. An online search will reveal a number of articles giving a particular method for calculating future price.
An investor focusing on the GARP strategy would look for stocks with a price to earnings ratio (PEG) of no more than one. This reflects the PEG advice given by Peter Lynch. A PEG of one indicates the stock's PE ratio is in line with its expected earnings growth. A PEG of no more than one indicates the stock most likely is selling at a reasonable price. Our goal is to find companies that have sustainable growth potential, but currently are somewhat undervalued.
Typical GARP investors look for earnings growth to be 10-20 percent. Stocks with higher growth rates tend to be more risky and have more price volatility. GARP investors look for an investment comfort zone or middle ground between high growth stocks that can form bubbles and then crash quickly and value stocks that often go sideways for an extended time period. Criteria for screening for stocks meeting GARP standards are available at Fidelity. Note that definitions of each criterion are available and also that you are able to edit the criteria to meet your needs.
An Investopedia article provides more information about the GARP investing strategy. Another interesting article about GARP investing is available at the Share Market School.
Sandy is an InvestEd Inc. director and serves as vice president for education. She is lead editor and prepares the general program brochure for the InvestEd conference. Sandy, an O'Hara Award recipient, is a former member and president of a local investment club. She has helped form investment clubs, presented introductory investing programs, and taught stock study and mutual fund classes at local, regional, and national events. Sandy is professor emeritus, Georgia Southern University.
When Is Good
Have you ever wondered how to get everyone in your group together for a meeting, either online or face to face? The free website When is Good helps you do just that by letting you know when members of your group are available for an upcoming event.
A video on the website shows you how to set up the survey invitation to those you wish to attend your gathering. Simply bring up the grid (calendar) and then highlight the times you are available on specific days. Click Create an Event. A unique invitation link will appear for you to use in communicating with your group.
When you click on the Send option, an email message pops up with a pre-populated message. You just insert your email addresses.
Those receiving the link see the proposed times and highlight the times they are available. They may insert a note to let you know their preferences of times or to provide any other information you as the meeting organizer might find helpful. You then check your results page, using a results code the site assigns. When you mouse over the name of one of the group members who has replied, you see the responses from that individual. You now have the information about the availability of each of the members of your group that you need to set up your meeting.
When you click on "watch video" on the opening page of the website, you will see that several short videos are available. The "more options" video demonstrates opportunities for naming the event, setting different time periods, changing the link that you email to group members, and altering times you have selected. The "your event links" video identifies the three links you will use: the link you send to those invited to your event, the link you will click to view your results, and the link you may use to edit the event. You have the option of checking an alert box so you know when someone has made a selection. This lets you notify those who have not yet made a selection. The "your results" video includes the direction that you must enter your results code before viewing the results of your survey. A time zones video lets you know an option to select a particular time zone is available, should your group members reside in different time zones across the country.
A Frequently Asked Questions (FAQ) section includes a variety of questions and answers for those getting acquainted with the website. While users of the website may choose to create an account, doing so is not necessary. A premium account also is available. With this premium account, the responders have the option of selecting times "perfect" for them, "fine" or OK, or "possible, but not ideal." With the premium account, the meeting organizer has the option of importing the results into an Excel spreadsheet.
Give When is Good a try. No sign up required, no password, no cost, no fuss.
Jerry is an InvestEd Inc. director and president. He is a conference instructor, served as chair of the 2009 and 2010 conferences, and is a member of an online investment club. Jerry is a past president and current director of the Houston Chapter of BetterInvesting. He has taught a number of 401(k) and mutual fund programs at national events. Employed in the petrochemical and refining industry for over 35 years, Jerry is retired from LyondellBasell.
Questions? Contact InvestEd
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