Tags: development, index, price, ratio, research, stock
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Price/R&D Ratio equals to current market capitalization divided by last year R&D expenditure.
This ratio is very important to evaluate research based business. For instance a pharmaceutical company has to invest heavily in research to replace its product as they lose patent protection or become obsolete.
Of course not all research can succeed in delivering good results, so there is no guarantee that a company with low P/R&D ratio will produce great earnings in the future.
Research and development are booked as expenses. Money which is gone like what if it was spent on electricity or heating.
This is not entirely correct, specially for Internet companies.
A transportation company that buys a new truck books it as an asset that will make money for them over its lifetime. Only the depreciation of the truck will be booked every year as expense.
An Internet Company adding a new function to its website has to book the investment as expense.
A functional website looks more like an asset than an expense. It can be a money making engine like google.com or Ebay.com . In my opinion money used to buid a new google.com feature should be booked as an asset improvement .
Nobody really knows.
Buying stocks when they are falling like this is a bit like catching falling knives. I’m probably going to get hurt. It is more healthful to wait for knives to hit the ground to easily pick them up. Maybe I should wait until current sell off finishes to pick up stocks at lower prices, rather than buying now and maybe seeing stocks continuing to fall tomorrow.
Of course if today was the bottom (the ground) I’d see a rebound tomorrow and higher prices.
Unfortunately there is one day every year in which the market is at its minimum and many days in which market is on its way down, so I shouldn’t bet on the fact that I’m buying on a minimum. (more…)
10 largest stock markets in the World by market capitalization in 2005 and 2006 (with interesting preview of 2007 AND 2008 IN COMMENTS) January 2, 2008Posted by deminvest in investment, investment strategies, stock faq.
10 biggest stock markets in the World by domestic market capitalization in 2005 (USD bn)
1 NYSE Group 13,632.3
2 Tokyo Stock Exchange 4,572.9
3 Nasdaq Stock Market 3,604
4 London Stock Exchange 3,058.2
5 Euronext 2,706.8
6 Canadian TSX Group 1,482.2
7 Deutsche Börse 1,221.1
8 Hong Kong Exchanges 1,055
9 BME Spanish Exchanges 959.9
10 SWX Swiss Exchange 935.4
10 biggest stock markets in the World by domestic market capitalization in 2006
1 NYSE Group 15,421
2 Tokyo Stock Exchange 4,614
3 Nasdaq Stock Market 3,865
4 London Stock Exchange 3,794.3
5 Euronext 3,708.2
6 Hong Kong Exchanges 1,715
7 Canadian TSX Group 1,700.7
8 Deutsche Börse 1,637.6
9 BME Spansih Exchanges 1,322.9
10 SWX Swiss Exchange 1,212.3
We can notice that Hong Kong has moved up 2 positions from 2005 to 2006.
2007 top ten will be calculated and published in the next few day, but we can have a preview by looking at November 2007 data:
1 NYSE Group 15,525
2 Tokyo Stock Exchange 4,523
3 Nasdaq Stock Market 4,061
4 London Stock Exchange 3,949
5 Euronext 4,283
6 Shanghai 3,279
7 Hong Kong Exchanges 2,723
8 Canadian TSX Group 1,974
9 Deutsche Börse 2,085
10 BME Spanish Exchanges 1,801
Where we see an explosive new entry: Shanghai which got in directly at n.6 and kicked Switzerland out of the top 10.
I have been posting for a month about the big three money makers Google EBay and Microsoft. This week they all announced great earnings, which was no surprise to me.
What surprises me is the fact that the three “Wonders of the World” did not show important stock rise. Must be the old wolf Bubble still scaring backward looking analysts.
What does a stubborn minded proletarian investors do when he sees that professional gurus and overpaid analysts are all underestimating the NASDAQ?
He buys buys buys… More than he can afford.
Google is cheap. It has about the same price it had at the beginning of 2006, but meanwhile its earnings and revenue doubled. Maybe I shod have more doubts about Google, like Finance Ninja has, but now I am buying:
1) the best brand in the world,
2) the fastest growing large company,
3) the giant that everybody admires,
4) the largest Internet audience on Earth,
5) Worlds greatest innovators
at Forward P/E: 25.09 according to Yahoo Finance.
I changed my Free Stock Strategy with the New Free Stock Strategy:
1) I chose a stock I like every month, I discuss it with Blog readers, then I invest $ 1000 on the stock.
2) I wait until stock’s value goes 40% up.
3) I sell enough shares of the stock for the total amount invested, including commissions.
4) Remaining shares of this stock are “Free Shares”. I keep them forever. They are mine, but I haven’t paid them :-).
The Dogs of the Eurostoxx 50 2007 January 31, 2007Posted by deminvest in ABN Amro, Deutsche Telecom, Dogs of the Eurostoxx 50, Enel, Eni, European Stocks, Fortis, ING, investment, investment strategies, Single stocks, Societe Generaale, stock faq, stock I own, stocks, stocks that pay high dividends, Telecom Italia, Tlefonica.
We, the people, love dividends. We like them because we always have to work and at least when we invest we want to see money flow on our bank accounts without having to work for once. We like dividends because we trust companies that are able to pay cash year after year. The Dogs of the Dow are well known. They are the 10 stocks that deliver the best dividends among the 30 stocks that are included in famous Dow Jones Industrial Average. But there are dogs also outside USA. Here I present a nice table of the Dogs of the Eurostoxx 50, which is the index of 50 most important companies. The Dogs are the best 10 dividend payers.
The Dogs of the €urostoxx 50 1/1/2007
Which are world’s 10 largest stock markets by market capitalization? January 24, 2007Posted by deminvest in dictionary for democratic investors, investment, investment strategies, nasdaq, stock faq.
That interesting (or stupid?) question came to my mind. I don’t know how. The Internet has its special way to hide from you figures that matter, and flood you with detailed, plentiful, useless numbers. So All I could find are the figures of year 2000.
The world’s 10 largest stock markets by market capitalisation at the end of 2000
(in $ million)
Those numbers are the best I could get on-line.
What does Qtrly Earnings Growth mean on Yahoo Finance stats and on other finance sites? August 31, 2006Posted by deminvest in dictionary for democratic investors, investment, stock faq.
Yahoo Finance is Internet’s main source of information and data on stocks. The most important page that Yahoo Finance has about each stock is the “Key Statistics” page. On this page one of the most important numbers, which I always consider before deciding to buy a stock, is:
Qtrly Earnings Growth (yoy): stands for Quarterly Earnings Growth (year on year). It is a percentage measure of the growth of earnings in the last quarter reported, compared to the earnings of the same quarter of the previous year.
Hugh? Not so simple to understand without an example: