Daily Investment Tips

The biggest myth spread by Facebook haters is Facebook doesn’t turn a dim. This people have a hate for everything Facebook and it is only natural they look for anything negative and in the process miss the positive.

Facebook Profits Facts

According to Reuters, Facebook’s revenue doubled to $1.6billion in 2011′s first half, a source with knowledge of its financials told Reuters. Facebook profits during that same period was $500 million.

Estimating where Facebook Profits & Revenues now stand

Estimating financial results for a fast-growing company like Facebook is always difficult, since so much is unknown, but if figures provided by the WSJ and the NYT are correct, the network’s revenue climbed about 160 percent in 2010, and its profit doubled. Continuing that kind of growth would result in revenue of more than $5 billion this year, and assuming the profit margins stay at 20 percent, profit may be close to $1 billion.

written by Constantine Njeru \\ tags: Estimates, Facebook, facebook profits, Myth, Nyt, Profit Margins, Profits, Reuters, Wsj

IPO Laddering was a practices that was common in the 1990s tech bubble. Laddering requires IPO investors to buy more shares once trading begins. Critics complain this can create false momentum.

IPO laddering was an IPO risk during the 1990s tech bubble.

A law website explains how Laddering tricks retail investors:-

Investors observe that an IPO stock’s prices are rising and join in the trading, assuming the shares are moving at an honest rate. Laddering artificially balloons the value of a stock, making it appear to be a hot pick before investors. After the IPO stock’s value rises, the client-investors often sell their shares and make huge profits. Those who are not client-investors of the underwriting firms, and thus not aware that the value of the stock has been inflated, fail to sell, and end up holding highly overpriced shares.

People whjo make money from IPO laddering

In the end the people who make money are the executives of companies that the underwriting firm does banking business with and the investment banks that boost commissions.

written by Constantine Njeru \\ tags: 1990s, Balloons, Commissions, Investment Banks, Ipo Laddering, Ipo Stock, Momentum, Money, Profits, Retail Investors, Risk, Stock Prices, Stock Value

At $500 – 600 Google stock might seem expensive but if you look at Google fundamentals you may understand why 35 out of 38 Google analysts polled by Thomson Financial rate Google shares a Buy.

Google Stock Forecast : Google Stock prediction : Google stock outlook

One fundamental that makes a good case for Google stock to rise higher is data on internet advertising.

The nation’s top 100 advertisers direct just 5.5% of their total ad spending to the web, according to industry trade publication Advertising Age. Meanwhile, Internet advertising is expected to hit 9% of total ad spending by 2011, according to Jupiter Research, an industry research firm.

Paid search advertising, which is Google’s bread and butter, accounts for 40% of total ad spending on the Net and is the fastest growing category, helped by the fact that it’s both cost effective and highly scalable.

“Even at 40%, search has just barely scratched the surface,” Aggarwal says. “We think advertisers on a long-term basis are going to embrace search. Google, with the largest market share, is the biggest beneficiary of that growth.” Data Source: smartmoney.com article.

Although Google has been accused of being a one trick-pony that relies 99% on advertising, the above data shows Google core business of  search advertising is solid and the company will continue on the path of higher revenues, higher profits that translates to a higher stock price.

Facebook : The elephant in the room

Facebook is growing fast and attracting advertisers but i don’t think Facebook is a threat to Google business. Google is good at search advertising while Facebook is good at display advertising.

written by Constantine Njeru \\ tags: Advertisers, Advertising Age, Aggarwal, Amp, Bargain, Beneficiary, Bread And Butter, Core Business, Data Core, Data Source, Display Advertising, Facebook, Google, Google Google, Googles, Internet Advertising, Investing Stocks, Jupiter Research, Market Share, Nbsp, Profits, Search Advertising, Search Google, Shares, Show Business, Smartmoney, Stock Forecast, Stock Outlook, Stock Prediction, Stock Price, Term Basis, Thomson, Thomson Financial, Trade Publication, Trick Pony

In 2010 GE had $150 billion of revenue, and $12 billion of net profit. But in 2010, this massive and wildly profitable company paid Zero in U.S. income taxes, says the New York Times.

How General Electric Pays Zero Taxes and how you too can lower your taxes.

According to the NY Times article, GE aggressively lobbys for tax breaks and engages in innovative accounting that enables it to concentrate its profits offshore.

If you want to lower your taxes like GE you need to fiercely start lobbying your member of congress to make a case for lower taxes. If need be threaten him or her with refusing to vote for him/her next time. A more crazy idea is join the tea party movement.

Next, talk to your accountant and attorney about setting up an offshore trust fund that is designed to minimize your taxes. It might be expensive but if you have built a substantial fortune it might be worth it.

written by Constantine Njeru \\ tags: Accountant, Accounting, Crazy Idea, General Electric, Income Taxes, Lower Taxes, Member Of Congress, Net Profit, New York Times, Ny Times Article, Offshore Trust, Profitable Company, Profits, Substantial Fortune, Tax Breaks, Tea Party, Trust Fund

Bank of America is one of those rare companies that distribute profits to shareholders. during the latest investor conference, the CEO, Brian Moynihan said BofA aims to pay out 30 per cent of its annual earnings in dividends.

Bofa profit forecast & prediction

BofA has predicted pretax earnings of $35bn-$40bn a year once its businesses recovered from the financial crisis.

BofA dividend yield

It means shareholders could be set to receive close to $10 billion in dividends.

written by Constantine Njeru \\ tags: Amp, Bank America, Bank Of America, Bofa, Brian Moynihan, Ceo, Dividend Policy, Dividend Yield, Dividends, Financial Crisis, Investor Conference, Pretax Earnings, Profits, Rare Companies, Shareholders

The good times are around the corner! That was the message from Bank America CEO during the company’s first investor conference since 2007.

Bank Of America Profit Forecast & Prediction.

The chief executive of Bank of America has forecast and predicted pretax earnings of $35bn-$40bn a year once its businesses recovered from the financial crisis.

Why Bank of America stock may be set for Growth

Bank of America stock is currently trading at $14. Last year profits were around $11 billion. If the company delivers in it’s promise of growing profits 3 fold, then the stock could be set for a massive upswing.

The CEO, Brian Moynihan had a sweetener for shareholders, he said BofA aims to pay out 30 per cent of its annual earnings in dividends.

written by Constantine Njeru \\ tags: Amp, Bank America, Bank Of America, Bofa, Brian Moynihan, Ceo, Chief Executive, Dividends, Financial Crisis, Good Times, Growth Stock, Investor Conference, Pretax Earnings, Profits, Promise, Shareholders, Stock Prediction, Stock Trading, Sweetener, Upswing

Wal-Mart is one of those few American companies that distribute their profits to share holders. Wal-mart pays quarterly dividends.

Wal-Mart has increased its dividend every year since it declared its first one in 1974.

The world’s largest retailer last month reported a 27 percent increase in fourth-quarter net income as it benefited from cost-cutting and strong sales overseas. Buoyed by that growth it is increasing its annual dividend 21 percent.

Wal-Mart Quarterly Dividend

Wal-Mart said it will pay an annual dividend this year of $1.46, up from $1.21. It will pay quarterly dividends of 36.5 cents in April, June, September and January in fiscal 2012, which ends Jan. 31.

written by Constantine Njeru \\ tags: Cost Cutting, Net Income, Profits, Quarterly Dividend, Quarterly Dividends, Share Holders, Strong Sales, Wal Mart

An interesting list for 2011 is the ranking of top ten hedge funds manager. It is a list of largest generator of profits for investors among hedge funds. The ranking calculates how much profits a hedge fund manager has generated since he opened for business.

This is the list of top ten hedge fund managers as December 2010.

1. George Soros – $35.2 billion

2. John Paulson – $32.2 billion

3. Ray Dalio’s of Bridgewater Pure Alpha -$22 billion

4. Seth Klarman of Baupost Group’s – $15.6 billion

5. David Tepper of Appaloosa – $14.5 billion

6. Bruce Kovner’s of Caxton – $13.1 billion.

7. Moore Capital Management Partners – $13 billion

8. Brevan Howard Fund – $12.5 billion

9. Farallon Capital – $12.2 billion.

10. Ed Lampert’s ESL Partners – $12 billion

written by Constantine Njeru \\ tags: 1 Billion, Appaloosa, Baupost Group, Bridgewater, Bruce Kovner, Capital Management Partners, Caxton, David Tepper, Ed Lampert, Esl, George Soros, Hedge Fund Manager, Hedge Fund Managers, Hedge Funds, Investors, John Paulson, Moore Capital Management, Profits, Ray Dalio, Seth Klarman

Billionaire hedge fund manager John Paulson will forever be remembered for $4 billions he made in 2007. When the housing market was burning the money manager was making billions.

The latest news is John Paulson did it again by earning an estimated $5 billion in 2010 thanks mainly to bets the economy would recover. This is better than the $4 billion haul made off the subprime bet.

How John Paulson Makes Money

John Paulson runs his own hedge fund investment firm, Paulson & Co. Inc. (PCI). It is an employee owned hedge fund sponsor, primarily providing services to pooled investment vehicles. He is earns money through commissions on funds under management plus a share of profits.

John Paulson Investing Strategy

The firm manages separate client-focused portfolios, employing merger arbitrage, long/short, and event-driven strategy to make its investments. Paulson & Co. Inc. utilizes fundamental analysis to make its investments, benchmarking the performance of its investments against the S&P 500 Index.

John Paulson Investment Philosophy

In a Wallstreet Journal interview this is how he summarizes his investment philosophy: “The flexibility of having long and short exposure across the capital structure allows us to optimize performance across market cycles. Our goals are capital preservation, above average returns over the long term, and low correlation to the markets.” As the market recovers from its shortfalls of the past years, Paulson is betting on strong economic growth in the recovery: “it is time to be in the stock market,” he says, and that now is not the time “to be under-invested”.

written by Constantine Njeru \\ tags: Amp, Bet, Bets, Billionaire, Billions, Capital Preservation, Capital Structure, Commissions, Driven Strategy, Economy, Fund Investment, Fundamental Analysis, Hedge Fund Manager, Housing Market, Investment Firm, Investment Philosophy, Investment Vehicles, Investments, John Paulson, Market Cycles, Merger Arbitrage, Money Manager, Portfolios, Profits, Shortfalls, Stock Market, Wallstreet Journal

Verizon finaly gots it’s hands on the Iphone, the big question is how the Iphone will impact on Verizon Revenues, profits and ultimately Verizon stock.

When Verizon reported their 2010 financial results, Verizon communications Executives projected revenue growth of between 4% and 8% in 2011, well above 2010′s 1.9%. They also estimate 11 million IPhone activations this year.

11 million iPhone activations is not peanuts, but keep in mind Verizon is spending near $4 – 5 Billion to subsidise the Iphone. That means the Iphone subsidy will eat into the profits.

Verizon stock prediction / forecast 2011

Verizon shares are currently trading 16 times 2011 forecast and historically the shares EPS has been 15. The stock now seems to be as high as it can get for 2011.

Expect the stock upside to happen, starting in 2012, because that is when the company will start showing the benefits of investing in Iphone. When announcing 2010 results, the company said it expected earnings-per-share growth in 2012 to about double 2011 number.

To quote Verizon executives thoughts on the future of the company “really explode over the next several years.”

written by Constantine Njeru \\ tags: Earnings Per Share, Financial Executives, Iphone, Iphone Activations, Peanuts, Profits, Quote, Share Growth, Stock Forecast, Stock Prediction, Stock Shares, Subsidy, Verizon, Verizon Communications, Verizon Stock, Year 11