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Healthy Wealthy Wise Project

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  • Apple Is Selling Below Intrinsic Value, So Now We Wait On The Margin Of Safety [View instapost]
    Perhaps I haven't completely addressed this possibility, but I do several things to try to normalize net income. I adjust the income tax rate by averaging the actual paid rate with the current U.S. corporate rate. I also adjust net income by averaging extraordinary gains/losses over several years. My goal is to get to a number that better represents underlying operations.
    Feb 21 03:48 PM | Likes Like |Link to Comment
  • In Defense Of Apple: Battling The Mounting Hysteria [View article]
    Apple is no different than any other company in history, it's stock is worth the present value of future cash flows, discounted at an appropriate rate. I have a $419 price target I'm looking for, Apple has been on my Watch List all year and I'll be happy if the market gives me the opportunity at that price. I wrote an instablog if you care to see the DCF.

    Simply excellent article by the way.
    Jan 25 02:54 PM | Likes Like |Link to Comment
  • Apple's Falling Share Price And The Market's Implicit Growth Implications [View article]
    Could not exactly follow your methods, but I have a $419 buy target myself, using DCF. Wrote an Instablog on the analysis. I have no prediction about where the stock price will or won't get to in the short-term, but I find it incredible that so many investors fail to do their own analysis, instead choosing to invest on one piece of news, two quarters of earnings, or something a few friends had to say. Unless you're a pure technical trader you owe it to yourself to attempt to find the intrinsic value, then purchase only with a margin of safety.
    Dec 13 09:15 PM | Likes Like |Link to Comment
  • Living and Learning with Tom Demark Indicators [View instapost]
    Hi - these were good intermediate Sell signals on the stocks. See my latest article about the S&P 500, which has reached a Sell signal on 3 timeframes (monthly/weekly/daily) here:
    May 27 09:53 PM | Likes Like |Link to Comment
  • The Kelly Formula: Growth-Optimized Money Management Not for the Faint of Heart [View article]
    Thanks for link, that's a great book on the story behind the formula. I hadn't known Thorp's hedge fund had beaten Berkshire Hathaway so soundly during its run.
    Feb 4 05:25 PM | Likes Like |Link to Comment
  • High Conviction: This Hard Drive Maker Will Outshine the Competition [View article]
    Sold WDC yesterday, not based on fundamentals, but rather technical analysis. Here's a link to my instablog discussing:

    I still see WDC as greatly undervalued (see above post), but I'm testing the waters with using Tom Demark Indicators for entry and exit into value stocks. WDC is one of my first test cases.

    Also discussed at my personal site:

    Jun 2 12:47 PM | Likes Like |Link to Comment
  • High Conviction: This Hard Drive Maker Will Outshine the Competition [View article]
    WDC is one of only a few stocks I'm holding on to. Things it has going for it include:

    47% Cash ROIC (10 yr median)
    9% Profit Margin (10 yr median)
    10% Free cash flow yield, with history of predictable, high-growth earnings
    Sitting on 26% cash
    Price to peak earnings below 10

    I could go on (like price/sales of 1.0)

    Under any growth assumption, WDC is undervalued. My calculated Intrinsic Value is right at $105, though that assumes fairly high growth for the next 10 yrs. I'll be letting go of this one around $54 based on more conservative growth estimates.

    I agree this is a high conviction stock. In the current market few stocks offer the value of WDC.
    Apr 9 10:06 PM | 5 Likes Like |Link to Comment