The recent increase in fuel prices have left many of us finding alternative means to seek transportation in a manner that is cost effective. Using solar powered cars, are not only cost effective they are not as damaging to the environment as fuel. With the latest advancements in technology to transform solar energy to transportation, we have the opportunity to look at travel from a diverse perspective.

With the designs of the cars, the big awkward solar cars are becoming trendy and have a creative fun touch to the look of your car. There are some sleek designs and for those who are into space advancement, you will feel quite trendy. Solar powered cars are allowing humanity to take responsibility of the environment. There is still much room for these vehicles to enhance the travel time we may be use to, with the further advancement of technology, we may find ourselves using solar powered cars. These cars may be a solution to consider the fuel costs we are facing.

These vehicles may not go the speed we want currently, yet if they allow us to get from point a to point b that helps the environment and is not as pricey as fuel, we may need to consider alternative means.

More about George Divel

It is difficult to find a good investment advisor. The airwaves are filled with advertisement from company’s who say that you can invest on your own if you use the tools provided by these companies. But the truth is that investments are so complicated that even some professionals don’t have all the knowledge you need to do a good job.

So what can you do?

The best way is to persevere and try to find an advisor who has the experience and skills and who also is willing to spend the time to help you understand your financial situation. I was told that George Divel of GlobalWealthAdvisors in the state of Maryland was such an advisor so I decided to check him out.

I found his personal website (www.georgedivel.com) and I learned that George began his career at financial giant Morgan Stanley in Baltimore, MD, where he received the firm’s National Sales Director Award, Sales Excellence Award, and was a member of the Director’s Club. George was also the youngest Morgan Stanley associate to achieve Vice President status. That told me that he smart and ambitious. But would he be willing to spend the time on my personal situation, including wealth building, financial planning, education planning and cash management for my business? I got a good clue from further research when I discovered that George Divel was a frequent lecturer and seminar leader in the Baltimore area. I have had to make speeches and presentations and the fact that George made this a regular part of his business told me volumes about him. It said that he had confidence in his knowledge (since he was willing to speak in public about investing, and it told me that he was willing to invest his time, without compensation to make himself available. Also, when I visited his blog www.georgedivel.wordpress.com , I learned that George provided helpful information on a very large range of financial subjects and investments.

Buy New Orleans real estate. No, I don’t necessarily mean to actually buy New Orleans real estate, although it might be a very good idea. The point is that it is a good example of how extremely successful investors think.

You see, most very successful investors are contrarians. A contrarian is an investor who deliberately decides to go against the prevailing wisdom of other investors. Contrarians are not going to follow the crowd. In fact, they’re going to invest in whatever is being shunned by the majority of investors. That’s where they know they can find value. That’s where they know they can make huge profits.

Contrarians are the kind of investors that would be looking to buy New Orleans real estate and shares of New Orleans businesses when the post-Katrina conventional wisdom is that New Orleans is a disaster area that should be avoided at all costs and never to recover.

Contrarians were buying Google (GOOG) when it first went public in 2004 at $85. The conventional wisdom was that Google wasn’t worth more than $85 a share. Contrarians looked at Google’s pristine balance sheet, considered the fact that the company had a business model that was dominating the Internet, and bought. The rest is history. Google shares soared over 400% from the price of the original offering.

Contrarians were buying oil in 1999 when crude was less than $15 a barrel — there was supposed to be an oil glut, you know — and the crowd was buying ridiculously overpriced dot com stocks.

And now, I’m sure that there are some future billionaires looking seriously at investments like New Orleans real estate.

Michael Lewis, writing for Bloomberg, wrote a very interesting column about the wisdom of being a contrarian…

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_lewis&sid=arY5IrLH3a00#

The concluding paragraph is particularly noteworthy…

“But someone, somewhere is about to make a killing in New Orleans. Somewhere there is a hedge fund manager stealthily buying up New Orleans real estate, or a venture capitalist quietly creating a New Orleans fund, or a 26-year-old would-be entrepreneur who, having been rejected by Harvard and Stanford business schools, is deciding to make his empire in the ruins. And, as loathsome as he will seem in retrospect, I find him hard to dislike right now.”

Indeed.

Larry Holmes invites you to visit http://www.Money-Management-Wisdom.com/
You will learn how to become debt-free, save and invest money, cut taxes, manage risk, and achieve financial freedom in a much shorter time than you dreamed possible.

You wouldn’t build your home on anything less than a solid foundation.
Similarly, you can’t build wealth and financial independence without first having sound foundational principles to build upon.

I have found that many people are working on wealth building strategies such as maximizing their 401K returns, aggressive stock trading, and real estate investing without such a foundation.

Most of my clients are coming from a “one step forward, two steps back” cycle of wealth building that gets them nowhere in the long run.

There are steps you can take to make sure that you are maximizing and protecting your gains at the same time. Without these steps, you are destined to experience the gain-loss cycle which, in the end, is like spinning your wheels in the mud.

Discover how your employment circumstances affect your wealth building strategy and have more of the things you want by identifying your biggest expense and managing it without having to make more money.

Most people take gains in their cash flow to mean they can spend more on things they don’t need. It is human to want to surround yourself with the things you want to match how you feel about your new income from investments or a raise at work.

But what happens here is that you lose future earning power and you rip out pieces of your wealth building foundation because you are not putting new income to work by investing in your debt.

People talk a lot about returns on investments. Think of the return on a 13% credit debt that you pay off in 5 months aggressive debt investment. It’s NOT just 13% you are saving by investing in your debt!

Once that debt is paid off you can turn the payments you were making toward a larger debt, sometimes doubling the rate at which you are able to pay off that bigger debt. Combined, the return on your investment here is massive compared to regular stock investing!

Wealth building, in the beginning, is actually started with debt reduction and strict management. A change in attitude about your debt, from “liability” to investment, is the first step in true wealth building.

Today you should sit down and find the monthly expenses that truly don’t mean as much to you as building wealth does. See how you can eliminate some of your spending to invest in your debt in order to maximize your cash flow faster, giving yourself a raise!

Take most of what you now have available per month and turn it toward the next debt - raising the regular monthly payment by as much as you can while rewarding yourself with a little thing to note your accomplishment.

Before you take on another investment, think about the wealth you can build with the money that currently goes to debt. Once you have mastered your debt, all that money can go toward investments, savings, and living expenses that far outstretch what you are able to experience now.

The only aggressive investment strategy that has absolutely zero risk is debt investment. You cannot lose and the gains are always tremendous compared to any other form of investing.

Live your retirement years free of financial stress, relaxed and enjoying life due to automatic income streams you create through the powerful investments you can afford AFTER investing in your debt.

C.C. Collins is a respected financial strategist and
investing expert. His
NetWorthPublishing family of sites offers information and help with stocks,
mutual funds, retirement planning and wealth building.

What is Value Investing?

Different sources define value investing differently. Some say value investing is the investment philosophy that favors the purchase of stocks that are currently selling at low price-to-book ratios and have high dividend yields. Others say value investing is all about buying stocks with low P/E ratios. You will even sometimes hear that value investing has more to do with the balance sheet than the income statement.

In his 1992 letter to Berkshire Hathaway shareholders, Warren Buffet wrote:

We think the very term “value investing” is redundant. What is “investing” if it is not the act of seeking value at least sufficient to justify the amount paid? Consciously paying more for a stock than its calculated value - in the hope that it can soon be sold for a still-higher price - should be labeled speculation (which is neither illegal, immoral nor - in our view - financially fattening).

Whether appropriate or not, the term “value investing” is widely used. Typically, it connotes the purchase of stocks having attributes such as a low ratio of price to book value, a low price-earnings ratio, or a high dividend yield. Unfortunately, such characteristics, even if they appear in combination, are far from determinative as to whether an investor is indeed buying something for what it is worth and is therefore truly operating on the principle of obtaining value in his investments. Correspondingly, opposite characteristics - a high ratio of price to book value, a high price-earnings ratio, and a low dividend yield - are in no way inconsistent with a “value” purchase.

Buffett’s definition of “investing” is the best definition of value investing there is. Value investing is purchasing a stock for less than its calculated value.

Tenets of Value Investing

1) Each share of stock is an ownership interest in the underlying business. A stock is not simply a piece of paper that can be sold at a higher price on some future date. Stocks represent more than just the right to receive future cash distributions from the business. Economically, each share is an undivided interest in all corporate assets (both tangible and intangible) - and ought to be valued as such.

2) A stock has an intrinsic value. A stock’s intrinsic value is derived from the economic value of the underlying business.

3) The stock market is inefficient. Value investors do not subscribe to the Efficient Market Hypothesis. They believe shares frequently trade hands at prices above or below their intrinsic values. Occasionally, the difference between the market price of a share and the intrinsic value of that share is wide enough to permit profitable investments. Benjamin Graham, the father of value investing, explained the stock market’s inefficiency by employing a metaphor. His Mr. Market metaphor is still referenced by value investors today:

Imagine that in some private business you own a small share that cost you $1,000. One of your partners, named Mr. Market, is very obliging indeed. Every day he tells you what he thinks your interest is worth and furthermore offers either to buy you out or sell you an additional interest on that basis. Sometimes his idea of value appears plausible and justified by business developments and prospects as you know them. Often, on the other hand, Mr. Market lets his enthusiasm or his fears run away with him, and the value he proposes seems to you a little short of silly.

4) Investing is most intelligent when it is most businesslike. This is a quote from Benjamin Graham’s “The Intelligent Investor”. Warren Buffett believes it is the single most important investing lesson he was ever taught. Investors ought to treat investing with the seriousness and studiousness they treat their chosen profession. An investor should treat the shares he buys and sells as a shopkeeper would treat the merchandise he deals in. He must not make commitments where his knowledge of the “merchandise” is inadequate. Furthermore, he must not engage in any investment operation unless “a reliable calculation shows that it has a fair chance to yield a reasonable profit”.

5) A true investment requires a margin of safety. A margin of safety may be provided by a firm’s working capital position, past earnings performance, land assets, economic goodwill, or (most commonly) a combination of some or all of the above. The margin of safety is manifested in the difference between the quoted price and the intrinsic value of the business. It absorbs all the damage caused by the investor’s inevitable miscalculations. For this reason, the margin of safety must be as wide as we humans are stupid (which is to say it ought to be a veritable chasm). Buying dollar bills for ninety-five cents only works if you know what you’re doing; buying dollar bills for forty-five cents is likely to prove profitable even for mere mortals like us.

What Value Investing Is Not

Value investing is purchasing a stock for less than its calculated value. Surprisingly, this fact alone separates value investing from most other investment philosophies.

True (long-term) growth investors such as Phil Fisher focus solely on the value of the business. They do not concern themselves with the price paid, because they only wish to buy shares in businesses that are truly extraordinary. They believe that the phenomenal growth such businesses will experience over a great many years will allow them to benefit from the wonders of compounding. If the business’ value compounds fast enough, and the stock is held long enough, even a seemingly lofty price will eventually be justified.

Some so-called value investors do consider relative prices. They make decisions based on how the market is valuing other public companies in the same industry and how the market is valuing each dollar of earnings present in all businesses. In other words, they may choose to purchase a stock simply because it appears cheap relative to its peers, or because it is trading at a lower P/E ratio than the general market, even though the P/E ratio may not appear particularly low in absolute or historical terms.

Should such an approach be called value investing? I don’t think so. It may be a perfectly valid investment philosophy, but it is a different investment philosophy.

Value investing requires the calculation of an intrinsic value that is independent of the market price. Techniques that are supported solely (or primarily) on an empirical basis are not part of value investing. The tenets set out by Graham and expanded by others (such as Warren Buffett) form the foundation of a logical edifice.

Although there may be empirical support for techniques within value investing, Graham founded a school of thought that is highly logical. Correct reasoning is stressed over verifiable hypotheses; and causal relationships are stressed over correlative relationships. Value investing may be quantitative; but, it is arithmetically quantitative.

There is a clear (and pervasive) distinction between quantitative fields of study that employ calculus and quantitative fields of study that remain purely arithmetical. Value investing treats security analysis as a purely arithmetical field of study. Graham and Buffett were both known for having stronger natural mathematical abilities than most security analysts, and yet both men stated that the use of higher math in security analysis was a mistake. True value investing requires no more than basic math skills.

Contrarian investing is sometimes thought of as a value investing sect. In practice, those who call themselves value investors and those who call themselves contrarian investors tend to buy very similar stocks.

Let’s consider the case of David Dreman, author of “The Contrarian Investor”. David Dreman is known as a contrarian investor. In his case, it is an appropriate label, because of his keen interest in behavioral finance. However, in most cases, the line separating the value investor from the contrarian investor is fuzzy at best. Dreman’s contrarian investing strategies are derived from three measures: price to earnings, price to cash flow, and price to book value. These same measures are closely associated with value investing and especially so-called Graham and Dodd investing (a form of value investing named for Benjamin Graham and David Dodd, the co-authors of “Security Analysis”).

Conclusions

Ultimately, value investing can only be defined as paying less for a stock than its calculated value, where the method used to calculate the value of the stock is truly independent of the stock market. Where the intrinsic value is calculated using an analysis of discounted future cash flows or of asset values, the resulting intrinsic value estimate is independent of the stock market. But, a strategy that is based on simply buying stocks that trade at low price-to-earnings, price-to-book, and price-to-cash flow multiples relative to other stocks is not value investing. Of course, these very strategies have proven quite effective in the past, and will likely continue to work well in the future.

The magic formula devised by Joel Greenblatt is an example of one such effective technique that will often result in portfolios that resemble those constructed by true value investors. However, Joel Greenblatt’s magic formula does not attempt to calculate the value of the stocks purchased. So, while the magic formula may be effective, it isn’t true value investing. Joel Greenblatt is himself a value investor, because he does calculate the intrinsic value of the stocks he buys. Greenblatt wrote The Little Book That Beats The Market for an audience of investors that lacked either the ability or the inclination to value businesses.

You can not be a value investor unless you are willing to calculate business values. To be a value investor, you don’t have to value the business precisely - but, you do have to value the business.

Geoff Gannon writes a daily value investing blog and produces a twice weekly (half hour) value investing podcast at:

http://www.gannononinvesting.com