Topic
Investing
Portfolios held for years: how much any one stock should be, what buybacks and volatility do to returns, and how valuation models turn cash flows into a price.
Long-term results depend on a handful of decisions made early: how the money is split, how big any one position is allowed to get, and what you are willing to pay for a business.
The course on building a first portfolio covers the split; the valuation course covers the price. In between, the position concentration calculator shows how much of your result rides on the largest holding.
Viewpoints
All viewpoints →-
By the numbers
A Buyback Only Helps When the Share Count Actually FallsA buyback helps holders only by the net fall in the share count, and stock awards can refill most of what the company buys.
-
The case
Run a Reverse DCF Before You Build the Forward OneSolve for the growth the price already implies before forecasting your own; the gap between the two is the analysis.
-
By the numbers
Volatility Drag Makes Smooth Returns Compound FasterAt the same average, returns that swing less compound to a higher balance; judge any holding by what it compounds to.
-
Myth check
The Sector Rotation Model Is Tidier Than Any Real CycleThe rotation clock is a stylized model; treat it as a checklist of what to watch and let measured relative strength say what is leading.
-
House rules
Your First Stock Portfolio Needs a Sell Rule Before a Tenth StockWrite the trimming and selling rules before you add more stocks; a size cap and a broken-thesis exit shape a first portfolio more than stock picks.
-
Myth check
Your Index Fund Has a Concentration Problem TooA cap-weighted index fund puts its biggest slices in its biggest companies; know that weight before you add the same names on top.
Walkthroughs
All walkthroughs →Dictionary
Full dictionary →- Earnings yield
A company's earnings per share divided by its share price, expressed as a percentage, which is the P/E ratio turned upside down.
- Equal-weight index
An index that resets every member to the same percentage weight at each scheduled rebalance, regardless of each company's market value.
- Terminal value
The estimated worth, at the end of a forecast period, of all the cash a business is expected to generate in every year after that period, expressed as one lump sum.
- Treasury stock method
A way of counting dilution from options and warrants that assumes the company uses the exercise proceeds to repurchase its own shares, so only the net addition enters the diluted count.
Courses, practice and tools
-
Free course · Beginner
Mise en Place for Money: A Beginner Portfolio CourseSavers who have money in the bank and no portfolio yet, and want the plan settled before they buy a first fund or stock.
Lessons with a quiz at the end of each
-
Free course · Intermediate
What's It Actually Worth? A Stock Valuation CourseInvestors who read P/E ratios on a quote page and want to build and defend their own estimate of what a stock is worth.
Lessons with a quiz at the end of each
-
Game · Beginner
Build It, Then Break It: A Portfolio Stress Test GameWhether you can hold a portfolio through made-up shocks by rebalancing to a rule, without panic selling or chasing the latest winner.
-
Calculator
Buyback EPS CalculatorEarnings per share after a buyback shrinks the share count, net of any new shares issued at the same time.
-
Calculator
Position Concentration CalculatorThe weight of each holding and sector in your portfolio, and what a fall in the largest one does to the total.
-
Calculator
Volatility Drag EstimatorWhy equal gains and losses leave you behind, and the compound return a run of ups and downs really produces.