Picking Stocks — the Basics (Part 1)

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Help Investing | Picking Stock Basics

This is part 1 of a 2-part article on picking stocks.  In the article, we’ll explore how to pick them, and explain what metrics are commonly used when selecting them.  We will also provide a basic framework that can be used to evaluate a company for investment.

The Stock Picking Recipe

If you’re a self-proclaimed home chef like me (with little to no actual training in culinary arts), you know how useful a recipe can be.  Similarly, there are recipes for picking stocks and, in fact, each style of investment philosophy uses a similar recipe. The ingredients used within the recipe – in our case, financial metrics – to value a company and to estimate its future prospects, account for most of the difference between philosophies.

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An Introduction to Bonds

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Help Investing | Introduction to Bonds

What’s a bond, and why should I care?
Well, that’s a loaded question. You should care, though. In simple terms, bonds are loans. Instead of going to a retail bank and applying for a loan, many corporations, municipalities, and even the federal government issue their own “loans,” commonly known as bonds. These institutions seek the advice of investment banks to issue bonds and borrow money. Within the capital (funding) structure of a company, loans and bonds (debt) are “senior” to stocks and minority interests (equity), meaning that in the event of bankruptcy, bondholders must be paid before shareholders.

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Banking for Dummies: Mortgage Finance

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Today we have guest post from our friends over at Realized Volatility regarding the recent NPR/ProPublica piece on the mortgage giant GSE (Government Sponsored Enterprise) Freddie Mac.  RV gives some great insight into the mortgage backed security market and the general operations of the big GSE’s –

Let’s dive into the compelling arena of mortgage finance.  Specifically, we are going to take an inside look at the big GSEs (Fannie, Freddie, the like).

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The Smart Investors 3 Step Guide

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As investors, we all want to beat the market, but most people have a hard time doing it, let alone doing it consistently. In this 3-Step guide, we explore some simple techniques that will give your portfolio the edge in 2012. Following these 3 simple rules, we will take control of your portfolio and position it to beat the market.

So what do smart investors do differently than the rest?

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