Market Fluctuations: How to Act When They Happen

Chapter 8 of The Intelligent Investor focuses on dealing with market fluctuations. Graham opens this chapter advising investors to know about the possibility of these ups and downs. He urges us to be prepared financially and psychologically.

To be clear about the nature of potential fluctuations, Graham describes a probable set of circumstances. Within the next five years, shares of a given security may experience a 50+% price increase from its low point or a 30+% decline from its high point. Such changes in stock prices may bear no relationship to changes in economic values.

While the rise in prices sounds great, the decrease seems scary. Still, it’s this scenario for which Graham wishes to equip investors to withstand (and possibly profit from). He offers advice that I interpret in this way:

Limit Order, Explained

When placing a buy or sell order for a stock or ETF, I’m typically prompted to indicate whether my order is a limit or market one. What’s the difference and why does it matter?

Gross Margin Ratio, What It Is and Why It Matters

When I evaluate a company, one of the measures I consider is its gross margin ratio. I like to see a gross margin that is consistent over time. I also reflect on the story this ratio is telling.

As I’ve mentioned in previous articles, I’m a numbers person. Gross margin is definitely a numbers thing. But this ratio may also reveal clues about executive priorities, business stability, and competitive advantages.

Let’s cover the basics and then consider what the gross margin ratio may be telling me.

Page 2 of 612345...Last »