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Value Investing & Growth Investing – What Are They?

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Stock trading or investment is one of the most sought investment options for many investors. It does require some evaluation and lots of patience. Stock trading is not just about buying and selling stocks of different companies. However, it’s more about reading those companies, and there are two standard approaches – Value Investing and Growth Investing. There’s no need to panic if you have heard about them for the first time because our expert is here to help you out.

Our expert is none other than Malik Mullino, CEO of Jadeite Assets LLC and a retired-marine who’s been helping people for a long time.

According to Malik Mullino, ” value and growth investments are two fundamental approaches to stock investments “. Both have their perks and downs, but both seek to maximize the investment value to investors.”

To explain in it simple words, in value investing, investors go with undervalued stocks. In contrast, in growth investing, investors buy stocks of companies with the potential to outperform the market at the time.

Here’s a better breakdown of Value and Growth Investment to help you understand them in a better way.

Value Investment 

In the value investment approach, investors lookout for the companies which have fallen but still have strong fundamentals. These are the well established and big corporations, which have been trading below their worth.

There could be several reasons for a stock being undervalued. Public perceptions of these corporations matter a lot, which hinders the prices; chances could be that company or its central personnel could be caught in some scandal or some unethical practice. But at the same time, the company’s financials are still as strong it was, and that is why value investors opt for such stocks because the company’s finances will hold up, and after a while, the public will forget about these scandals, and the price will rise to where it should have been.

Consider a company X with a stock price of $20 a share, based on the number of shares outstanding divided by its capitalization. But, right now, it’s trading for $10 a share, which is quite a good deal considering that stocks’ price will be up after a while.

Here are some of the critical characteristics of the growth funds

  • Priced lower than the overall market: The idea behind value investing is that good companies’ stocks will bounce back in time if other investors recognize the actual value.
  • Priced below similar companies in the industry: Many value investors believe that most stocks are undervalued due to investors’ overreaction to recent company problems, such as low earnings, negative publicity, or it could be some legal issues, which might not matter in the long run.
  • Carry somewhat less risk than the market: There’s one good thing that these stocks take time to turn around so that value stocks may be more suited to longer-term investors.

Growth Investment

In the growth investment approach, the companies have registered more gains which have caught investors’ eyes since it is expected to continue with such a trend.

But what’s the reason behind such a good performance. Well, the gains might be unexpectedly high due to the company’s recent performance, or some of its product performing well enough in the market with a promise of ’emergence’ over the years.

Consider a company that’s been trading for $30 a share while its competitors are still at $18 a share and the price of stocks of the first company is rising steadily, then it will be considered as a growth stock or company.

Growth stocks can be found in small, mid or large-cap sectors as long as analysts conclude that they have achieved their potential.

Now, what’s the reason behind investors feeling confident about growth stock’s future. The main reason could be a company working on a product expected to excel in the coming years or minting more money than its competitors.

  • Higher priced than the market. Investors are willing to pay a high price with the expectation of selling them at even higher prices as the companies continue to grow over the years.
  • High earnings growth records: Growth companies potentially continue to achieve high earning regardless of economic conditions even if its not suitable for the market.
  • More volatile than the market. There’s a risk in buying a growth stock as its price could fall sharply any day, mainly if earnings don’t go well with big traders.

Well, there’s one more category, a blend of both; a stock can also be undervalued while performing better than the market standards at the same time.

Value Investing and Growth Investing – Which Is Better?

On comparing the historical trends, value stocks are considered to have a lower level of risk, atleast theoretically, since they are well established, and big-time corporations whose fate will turn around sometime in future, and investing in value stocks might not result in a capital loss since these stocks also pay dividends.

Meanwhile, growth stocks don’t offer dividends and reinvest the earnings back into the company. The probability of growth stocks going down is more than the value stocks if the company is unable to keep up with the market’s growth expectations. So overall, growth stocks come with the biggest reward and risk at the same time.

Some people opt for both value and growth stocks when investing for the long term since the risk will be reduced, and gains could be multiplied depending on how the market fares out in future. This approach enables investors to profit from the economic cycles, whether it’s beneficial for the value or growth stock.

As Malik Mullino says, the decision to invest is a personal choice. The same person can only decide whether to invest in growth or value stocks. It depends on their risk tolerance and investment goals. But it is essential to study the market and to evaluate the company before proceeding with the investment.

At last, it’s all about you. It’s only you who can decide where to put your money, but if you need help, you can reach out to our CEO Malik Mullino for any suggestions.

 

Source: Value Investing and Growth Investing – What Are They? – satPRnews

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Why Your Index Fund Is Built To Survive The Coronavirus Outbreak

With The market already down more than 10%, the coronavirus-triggered plunge may turn into one of the fastest bear markets to hit U.S. stocks ever. But, believe it or not, a passive investment in the S&P 500 may be the best way to ride out and ultimately profit from the storm.

As coronavirus spreads, the problems at these companies will worsen and cyclical sectors that track closely with global gross domestic product growth will also suffer. This morning, the industrial and materials sectors went into the red, posting negative returns for the past 12 months. They joined energy, down 30% over the year, as the only sectors to lose money. The S&P 500 is still ahead 7% year-over-year.

Here’s the good news: Your index fund already predicted all of this.

Even before the coronavirus became a global crisis, the S&P 500 was under-weighted in the types of stocks that were most vulnerable to the outbreak and it was heavily over-weighted in the software, internet, online retail and social media companies that are likely to either weather the storm, or thrive.

The Coronavirus Plunge

Coronavirus caused the quickest 10% market correction since the 2008 financial crisis.

                           

Almost a quarter of the S&P 500 index is comprised of the ten biggest companies in America by market capitalization: Microsoft, Apple, Amazon, Facebook, Berkshire Hathaway, Alphabet (Google), JPMorgan Chase, Johnson & Johnson, Visa and Wal-Mart.

These companies have pristine balance sheets and strong long-term growth prospects to manage through the outbreak. Some may also see increased sales as people stockpile food and health safety products, or benefit from people staying at home. About half of the overall S&P 500 is in information technology, healthcare and communications stocks —all unlikely to see major long-term disruptions due to the outbreak.

On the other hand, the types of businesses that are in free-fall, such as energy and retail, hardly make a dent as a weighting in the S&P 500. For instance, the entire energy sector entered 2020 at about the same weight as Apple alone. Thus energy’s 20% plunge over the past month is causing relatively minor pain. Retailers like Macy’s, Gap and Nordstrom that may struggle further are also minor weightings, in addition to small-sized drillers like Cimarex Energy, Helmerich & Payne, Cabot Oil & Gas and Devon Energy.

While holders of the S&P have sidestepped the worst stock implosions since the outbreak, they’re also big holders of potential beneficiaries.

Johnson & Johnson, United Health Group and Procter & Gamble are about 1% index weightings and they could see an uptick in sales as people all the world prepare for the virus’s spread. If more people begin to work from home, companies like Microsoft will benefit as demand spikes for its suite of cloud products including email and remote working services. Wireless carriers like Verizon and cell tower giants SBA Communications and American Tower will benefit from rising smartphone and internet activity.

Any surge in online sales will help ecommerce companies like Amazon and logistics warehouse operator Prologis as well as another S&P 500 member Equinix, one of the largest data center real estate investment trusts. Streaming services like Netflix and internet giants like Google and Facebook will also see a boost in eyeballs from masses of homebound Americans.

You guessed it. Each of these companies has high weightings in the S&P 500.

Your Index Fund Picks Winners

The biggest weights in the S&P 500 are also the largest and most successful companies in America.

                        

The index is well-prepared for the coronavirus because it is designed to track changes in the economy, which may actually be accelerated by the outbreak. The S&P 500 weights companies by market capitalization, meaning it increases exposure to companies with improving business prospects and rising stock prices, and it decreases exposures to those with worsening fates.

Already, people have been avoiding department stores and brick and mortar retailers, and driving more efficient vehicles, cutting back on oil and gas consumption. Movie theaters are being made obsolete by streaming media services. By design, the S&P has done a near-perfect job keeping up with these changing economic trends and consumer habits.

Investors, meanwhile, have spent the past decade bidding up the stock values of cash-generating software and internet companies, and have been abandoning stocks in companies with heavy debts and large pension obligations, or those exposed to economic cycles. Here again, the S&P 500’s algorithm has been trimming holdings in burdensome industrial companies and auto manufacturers. Information technology, the most heavily weighted in the index has fallen about 5% over the past month, but is still up 23%-plus over the past year.

In 2007, at the outset of the financial crisis, Berkshire Hathaway’s Warren Buffett famously predicted an ordinary investor in an S&P 500 index fund would beat just about any hedge fund on Wall Street. Buffett offered a $1 million bet—payable to charity—to anyone who thought they could pick hedge funds that would beat the index over the ensuing decade.

A hedge fund investor named Ted Seides took up Buffett’s wager. It wasn’t even close. Seides conceded a loss in 2015, waving a white flag of defeat before the decade was over. The S&P returned 8.5% annually over that ten-year stretch, while the average hedge fund failed to deliver half that return.

The reality is as follows: Market corrections like the current one are frightening. But sometimes, the smartest play is also the easiest. With an investment in the S&P 500, the house is on your side.

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Antoine Gara

I’m a staff writer at Forbes, where I cover finance and investing. My beat includes hedge funds, private equity, fintech, mutual funds, M&A and banks. I’m a graduate of Middlebury College and the Columbia University Graduate School of Journalism, and I’ve worked at TheStreet and Businessweek. Before becoming a financial scribe, I was a part of the fateful 2008 analyst class at Lehman Brothers. Email thoughts and tips to agara@forbes.com. Follow me on Twitter at @antoinegara

Source: Why Your Index Fund Is Built To Survive The Coronavirus Outbreak

Multistreaming with https://restream.io/?ref=JQjEP Snoop Dogg is worth $124M, but doesn’t have a will

Measuring The Total Economic Impact Of Unified Endpoint Management

Today, the average IT organization is spending at least 5% of their organization’s annual revenue on IT investments – and the cost of each investment spans far beyond its price tag. Each one needs to be deployed and maintained by IT staff that is grappling with more tools and software products than ever before. Of course, supporting an IT staff comes with its own set of costs and challenges. CIOs, CTOs, and their teams are human resource scarce and spread extremely thin, so the opportunity cost of focusing on one tool versus another has never been greater.

This complexity comes at a time where clearly defined IT strategies that bring about positive impact to the business are non-negotiable. According to IDG’s 2019 State of the CIO report, “62% of CIOs say that the creation of new revenue generating initiatives is among their job responsibilities.” 88% claim to be “more involved in leading digital transformation initiatives compared to their business counterparts.” Net-net, the onus is on IT leaders to streamline efficiencies, reduce total cost of ownership (TCO), and net a return on investment (ROI) for the business.

IT investment decisions driven by real customer data

Forrester has been instrumental in helping business decision-makers overcome their resource, budget, and investment challenges by introducing a Total Economic Impact™ (TEI) methodology. Not only does the TEI take costs and benefits into account, but also the time saved and economic impact of strategic decisions made. Forrester’s TEI assessments are drawn from real client experiences with vendor products and services. The team diligently documents customer outcomes to better understand their positive or negative business impact. Consulting this unique research methodology helps business decision makers justify and future-proof their investments.

Making the transition to unified endpoint management

If your organization is like most, it has a mix of devices that employees use to get work done – whether they’re corporate-liable or supported under a bring your own device (BYOD) program. With 464 custom apps deployed across the average enterprise, procuring a means to manage devices and everything on them (not just apps, but also content and data) has become mission-critical for businesses.

Traditionally, mobile device management (MDM), enterprise mobility management (EMM), and client management tools (CMTs) have been relied upon to get the job done. However, business use cases for devices have become more complex and wide ranging. These shifts are necessitating a tool that makes it possible to manage everything from one place. This is unified endpoint management (UEM).

Commissioned by IBM, Forrester Consulting recently conducted a TEI analysis of IBM Security MaaS360 UEM customers to determine whether they are reducing TCO and netting a quick break-even on their investment. The Forrester team took the time to glean feedback from 19 MaaS360 UEM clients representing financial services, nonprofit, utilities, manufacturing, and professional services industries. These individuals are responsible for managing anywhere from 500 to 100,000 devices for their respective businesses each day.

How UEM from IBM resulted in significant ROI1

Across the 19 clients that were interviewed, Forrester identified the following key benefits. These amount to a three-year 160% ROI and payback in less than 3 months:

  • Endpoint configuration: a 96% reduction in time spend provisioning devices
  • End-user setup: a 47% reduction in time spent getting employees up and running
  • Modern management: $22,960 saved from simplifying their management approach
  • Support ticket remediation: 50% fewer tickets and 55% less time taken to resolve them
  • Security breach remediation: 80% reduction in number of incidents experienced

Of course, these benefits were experienced by a composite organization used to represent the 19 customers surveyed by Forrester. Organizations considering UEM that are actively seeking their own customized TEI assessment can now work with IBMers to do just that. Request your own complementary assessment today to understand whether you can expect a return on your UEM investment, and if so, how quickly you can expect your payback period to arrive.

Request a custom Forrester TEI assessment now

1 The Total Economic Impact™ Of IBM MaaS360 With Watson, a commissioned study conducted by Forrester Consulting, April 2019

John Harrington John Harrington

John Harrington is a Program Director at IBM Security, overseeing product marketing for data security and unified endpoint management (UEM). In this capacity, he works with product managers, product marketers, and account managers to provide guidance for businesses encountering modern cybersecurity challenges. He’s focused on helping clients learn how to establish digital trust and the various ways Guardium and MaaS360 can help them keep their data and endpoints protected. John is also working towards an MBA graduate degree at Villanova School of Business, and spends his spare time exploring the city of Philadelphia with his wife and their two beagles.

Source: IBM Security BrandVoice: Measuring The Total Economic Impact Of Unified Endpoint Management

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Ever Thought Of A 100-Year Green Bond? French Railway Firm Is Pitching The World’s First

It seems green bonds, sometimes referred to as climate bonds, are becoming ever so popular by the day with issuance tipped to reach record levels in 2019. However a French railway firm has notched industry trend setting way up the charts by launching the world’s first 100-year green bond.

Societe Nationale des Chemins de Fer Réseau (SNCF Réseau), France’s state-owned railway network management firm, which has already raised €2.8 billion ($3.10 billion) in green bonds in 2019 alone, confirmed Friday (August 23) that it has launched its 100-year product.

The near €100 million in book value raised would be used to finance green projects meeting its eligibility criteria for improvement, maintenance and “energy optimization” of railways. Some of the funds would also be allocated to sustainability components of new route and track extensions, the company said.

In total, SNCF Réseau has so far raised €5.4 billion in green bonds, nearly doubling the figure this year. Following the latest investment round in its green bond program, the French company now ranks seventh in the global green bond issuance market.

Green bonds are typically asset-linked and backed by the issuer’s balance sheet, earmarked to be used for climate and environmental projects. According to rating agency Moody’s, issuers brought $66.6 billion of green bonds to market globally the second quarter of 2019, propelling first-half issuance to a record $117 billion up 47% on an annualized basis compared to the first six months of 2018, and compared against the 11% year-over-year growth for the same six month periods of 2017 and 2018.

However, there has been criticism over the criteria for green bonds. On paper such bonds allow firms to raise finance for low carbon and climate-friendly projects thereby offering a promising solution to those looking to go green via climate initiatives.

But there have been instances of companies using the proceeds of green bond issuance to pay of other debts. Some issuers offer green bonds targeting specific projects, but often fail to outline a clear, long-term strategic environmental goal.

For its part, SNCF Réseau’s 100-year bond and previous issuance drives strictly comply with the European Commission’s green bond standard. The French railway network operator now takes over the title of the world’s longest maturing green bond from Energias de Portugal (EDP) and Energie Baden-Wuerttemberg (EnBW) whose bond had a maturity of 60 years.

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Gaurav Sharma

I am a UK-based oil & gas sector analyst and business news editor/writer with over 20 years of experience in the financial and trade press. I have worked on all major media platforms – print, newswire, web and broadcast. At various points in my career, I have been an OPEC, Bank of England and UK Office for National Statistics correspondent. Over the years, I have provided wide-ranging oil & gas sector commentary, including pricing, supply scenarios, E&P infrastructure, corporations’ financials and exploration data. I am a lively commentator on ‘crude’ matters for publications and broadcasting outlets including CNBC Europe, BBC Radio, Asian and Middle Eastern networks, via my own website, Forbes and various other publications. My oil market commentary has a partial supply-side bias based on a belief that the risk premium is often given gratuitous, somewhat convenient, prominence by cheeky souls who handle quite a few paper barrels but have probably never been to a tanker terminal or the receiving end of a pipeline. Yet having done both, I pragmatically accept paper barrels [or should we say ‘e-barrels’] are not going anywhere, anytime soon!

Source: Ever Thought Of A 100-Year Green Bond? French Railway Firm Is Pitching The World’s First

10 years ago, the World Bank Treasury issued the first green bond then laid out the first blueprint for sustainable fixed income investing, transforming development finance and sparking a sustainability revolution in the capital markets. Learn about the revolution.

Microloan Startup Tala Raises $110 Million In New Funding

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Tala, a Los Angeles startup that makes microloans to consumers and small business owners in emerging markets, is announcing today that it has raised $110 million in funding. The new Silicon Valley venture capital firm RPS Ventures, cofounded by Kabir Misra, former managing partner at Softbank’s $100 billion Vision Fund, is leading the round. Tala’s backers include PayPal, billionaire Steve Case’s VC firm Revolution, Chris Sacca’s Lowercase Capital and Data Collective, among others. The new funding values Tala at nearly $800 million, according to an investor. Tala has raised more than $200 million in equity investment to date.

Shivani Siroya, 37, founded Tala in 2011 after stints as an investment banking analyst and as an analyst at the U.N. Population Fund, where she did socioeconomic research. Tala’s mobile app lets people in Kenya, the Philippines, Tanzania, Mexico and India take out small loans ranging from $10 to $500. Most use the app to invest in their small businesses, like shops and food stands. To evaluate borrower risk, Tala uses cell phone data instead of credit scores, looking at loan applicants’ habits, like whether they pay their phone bills on time.

Siroya first launched Tala’s app in Kenya in 2014. Today it has more than four million customers who take out three to six loans a year at a 10% average monthly interest rate. Its 600 employees are spread across offices in Santa Monica, Kenya, Mexico, the Philippines and India. The company made Forbes’ Fintech 50 list earlier this year.

Tala’s closest competitor is Branch, a five-year-old San Francisco company led by Matt Flannery, who previously cofounded donation crowdfunding platform Kiva.org. Branch has four million customers and an average monthly interest rate of 15%. Earlier this year, it raised $70 million in equity financing from investors like Visa and Andreessen Horowitz, plus $100 million in debt. Tala also raised $100 million in debt over the past year to help fund its loans.

With its new capital, Tala plans to make a bigger push into India and expand to new countries, potentially in regions like West Africa, Southeast Asia and Latin America. It also plans to launch new products. In Kenya, Tala has already tested a micro health insurance offering that would cover customer visits to a hospital. It expects to launch its first microinsurance product in the next 12 months. It has also piloted a financial education and coaching program, and it plans to test additional products over the next year.

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Jeff Kauflin

I cover fintech, cryptocurrencies, blockchain and investing at Forbes. I’ve also written frequently about leadership, corporate diversity and entrepreneurs. Before Forbes, I worked for ten years in marketing consulting, in roles ranging from client consulting to talent management. I’m a graduate of Middlebury College and Columbia Journalism School. Have a tip, question or comment? Email me jkauflin@forbes.com or send tips here: https://www.forbes.com/tips/. Follow me on Twitter @jeffkauflin. Disclosure: I own some bitcoin and ether.

Source: https://www.forbes.com/

Trust: How do you earn it? Banks use credit scores to determine if you’re trustworthy, but there are about 2.5 billion people around the world who don’t have one to begin with — and who can’t get a loan to start a business, buy a home or otherwise improve their lives. Hear how TED Fellow Shivani Siroya is unlocking untapped purchasing power in the developing world with InVenture, a start-up that uses mobile data to create a financial identity. “With something as simple as a credit score,” says Siroya, “we’re giving people the power to build their own futures.” TEDTalks is a daily video podcast of the best talks and performances from the TED Conference, where the world’s leading thinkers and doers give the talk of their lives in 18 minutes (or less). Look for talks on Technology, Entertainment and Design — plus science, business, global issues, the arts and much more. Find closed captions and translated subtitles in many languages at http://www.ted.com/translate
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