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Goodwill "Capital" Devoted Towards Community Investment Education



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Educate Yourself

At BeatOrFree.com in Naples, Florida, our professionals believe in the liberation and education of the self-directed investor. With this in mind, we provided links to self-empowering resources on investor education.

Electronic Resources

Physical Resources

  • The Intelligent Investor by Benjamin Graham
  • Common Stocks and Uncommon Profits by Phillip A. Fisher
  • What Works on Wall Street by James P. O’Shaughnessy
  • The Wall Street Waltz by Kenneth Fisher
  • Berkshire Hathaway Letters to Shareholders by Warren E. Buffett

About the S&P 500 Index

The S&P 500 (S&P Index: ^GSPC) provides investors with the best indication of the health of the overall stock market and economy. It combines 500 selected companies into a market value weighted index (not share price) to give investors the best possible view of the US stock market’s true state. Read this article to learn more about the S&P 500 Index.

Why the S&P 500 Index Is Hard to Beat

There are at least three main reasons why approximately 86% of mutual or hedge fund managers fail to beat the S&P 500 Index.

Positive Selection Bias


The S&P turns over approximately 5% of its constituents every year (approximately 25 companies). New companies are typically added because their earnings are on an uptrend. Therefore, the index is programmed to contain the most successful companies in the business world only.

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Price Performance and Market Cap Weighting of Index Correlation 

The S&P Index is weighted by market cap. Therefore, it is likely to reward successful companies with greater weight and unsuccessful companies with less weight. Companies with increasing earnings tend to increase their market cap, while those with zero earnings growth tend to maintain them. Additionally, those with decreasing earnings tend to decrease market cap.

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Active Management Fees


Actively managed mutual funds or hedge funds charge 1% to 2% of assets under management, regardless of performance. On the other hand, index funds charge around 0.5% because they are passively managed. A 1% or more difference in returns can mean a substantial difference in performance.

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Investing Seminars

Intro to Investing, Part I: Overview – Class Syllabus 

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Investing Basics I – Overview

Why Invest? _______     ___________    ____________


Popular Asset Classes in Investing

Stocks

Common                       Preferred

           Priority               Less Than Preferred             Higher Than ___ But Lower Than ____

          IPO Price __________             Constant at $ _____

          Tenure of Ownership              Forever             Can Be Recalled After ______

          Volatility __________             Low


Bonds

         Corporate           Government            Municipal

Financial Strength              Varies               ________               High

Yields                    _____ Low                      Med

Guarantor                   Company Assets      US Treasury _____

Stocks or Bonds

Dimensions: Need for Income, Tolerance for Risk

Pricing Correlation and Factors


Financial Metrics (Investing Basics II) – Overview

Why Are Financial Ratios Useful?


The Classes of Financial Ratios and Selected Examples

               Liquidity => Current Ratio

               Profitability => Gross/Operating/Net Margin

               Valuation => P/E Ratio

Financial Statements (Investing Basics III) – Overview


How and Why Are Financial Statements Used?


Three Types of Financial Statements

1) ____________ shows company performance over ______________.

2) ___________ shows the company’s ______ and _________ during ____________.

3) _____________ shows where and how _______ is earned and used.


Key Examples of Each

__________ => Revenue, Net income also commonly known as _______ line and _______line

__________ => Asset is a future ______ to the company; liability is a future _______ against company.


Key: Using Financial Ratios and Financial Statements Together

Core Strategy


Rule of Three

          1) Strong Growth

          2) Wide Moat

          3) Right Price


Moat Definition and Analysis (Investing Basics IV) – Overview

Intro to Investing, Part II: Stocks and Bonds – Class Syllabus 

Stocks


Types and Properties: Preferred and Common


Purpose of Stock Issuance


Bonds


Types and Credit Ratings


Basic Properties: Maturity, Yield, Callability


Stocks and Bonds


Dynamics in Financial Markets


Role in Portfolio

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Intro to Investing, Part III: Financial Metrics – Class Syllabus 

Why Financial Ratios Are Useful


The Types of Financial Ratios


Liquidity Ratios: Current Ratio, Quick Ratio, Cash Ratio, Cash Conversion Cycle


Profitability Ratios: Gross, Operating and Net Margin, ROA, ROE, ROIC


Debt Analysis and Ratios: Debt Ratio, Debt to Equity


Investment Valuation Ratios: Price/Book, Price to earnings, PEG Ratio, Price to Sales, Dividend Yield

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Intro to Investing, Part IV: Financial Statements – Class Syllabus

How and Why Financial Statements Are Used


The Three Financial Statements: Income Statement, 

Balance Sheet, Statement of Cash Flows


The Income Statement


Balance Sheet


Statement of Cash Flow


Using Financial Statements and Financial Ratios Together

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Intro to Investing, Part V: Moat and Growth Analysis – Class Syllabus

Why and How Moat Analysis Is Used in Investing


Type of Moats


Examples of Companies With Moats


Widths of Moats


Growth Analysis

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