Stocks

3 simple methods to see if a blank check stock is cheap enough

Woman analyzing papers with stock market chart behind her
Woman analyzing papers with stock market chart behind her
Photo by Artem Podrez from Pexels

SPACs (Special Purpose Acquisition Corps) are all the rage now. I write a lot of articles online about these blank check vehicles. This article will pass on some of the techniques I use to analyze these stocks. It will show three easy ways to value the SPAC stock and help you pick the right one. At the end of the article, there are 5 examples of recent SPAC stock deals I have analyzed and written about using these methods.

1. Only Buy SPACs With Declared Merger Deals

This is the cardinal rule in blank check investing. There are a ton of SPAC stocks out there right now. Spacinsider.com


Investing

Two Strategies and Examples of Buying One Dollar For 50 Cents

Woman looking at laptop counting on her hands as if she is ready to invest her money
Woman looking at laptop counting on her hands as if she is ready to invest her money
Photo by Anna Shvets from Pexels

Benjamin Graham, the father of value investing, told a story about an oil pipeline company that he invested in that had $95 per share of cash and securities on its balance sheet. But the stock price, in 1926, was $65. Graham figured this out by simply reading the company’s financial statements, finding they had several million in liquid bonds, with no debt. Then he divided that number by the shares outstanding.

In other words, anyone could have bought up all the shares of the Northern Pipeline Company and then liquidated the bonds to pay for the acquisition. You would still…


Stocks

3 Ways To Know You Are Going Where Others Aren’t

Woman with backpack and snow hat looking forward to a river and mountain she has to cross
Woman with backpack and snow hat looking forward to a river and mountain she has to cross
Photo by Eric Dekker from Pexels

The movie Glengary Glen Ross has a famous scene with Alex Baldwin saying: “A, Always; B, Be; C, Closing. Always Be Closing.” That is his formula for success in sales. I submit that in the stock market and the world of investing, the phrase should be: “A, Always; B, Be; C, Contrarian. Always Be Contrarian.” In other words, to be successful in investing, always do the opposite as everyone else.

Last year, that would have meant three major things: (1) buy oil and energy stocks, (2) buy travel stocks like airlines, and cruise lines, and (3) buy entertainment stocks like…


Films

7 films about grief depressed roles that have comforted me

Photo by Karolina Grabowska from Pexels

There must be something wrong with me. I really like watching movies about people who have deep grief and depression. These movies provide some form of solace that I still can’t understand.

I recently saw Robin Wright’s new movie, Land, about a woman who has lost everything. She decides to move away from everyone. The movie is about her journey. It is lonely and depressing, but still uplifting. I found comfort in it.

It made me think about other grief-depressed people in movies that made me feel better. I really cannot explain this. Maybe it‘s because I get a sort…


Stocks

Free cash flow helps you focus on cash cow stocks that have enough cash flow to buy back stocks or pay dividends

Photo by Giorgio Trovato on Unsplash

Free cash flow helps an investor in tech stocks to figure out the winners. They have enough cash flow to do things like pay dividends, buy back stock, make acquisitions without a lot of debt, and/or pay down debt.

So finding tech stocks, which tend to be quite profitable, with the highest quality and growing free cash flow (FCF), is a reliable stock-picking method.

Free cash flow is the amount of cash flow left over after all revenue and necessary spending by a company. Technically it is derived by subtracting Capex spending (capital expenditures) from operating cash flow.

What is…


Investing

I use a simple probability theory trick to pick stocks, and my account is up 150% as a result

A person shaking their head looking confused
A person shaking their head looking confused
Photo by Ehimetalor Akhere Unuabona on Unsplash

Investing is basically not that difficult. You pick stocks you like and buy more if they get cheaper. Hang on for the ride and use common sense. I have written several articles about what not to do. But here is one trick that can help you pick winning stocks: use probability theory.

What? I am not a math whiz, you say. I can’t add two numbers together, much less use probability analysis, your mind says to me now. It’s hard enough to figure out what stocks to invest in. Don’t give me more work.

I understand. But let’s get real…


Writing

I watch movies, play poker, and trade stocks at the same time

Side view of young lady with glasses watching TV on her computer with coffee in other hand
Side view of young lady with glasses watching TV on her computer with coffee in other hand
Photo by Matilda Wormwood from Pexels

Here is how I write three articles a day — I watch TV, very scientifically I must add, and trade stocks, play online poker, and of course handle all kinds of emails, texts, and take calls (only from people I know).

You might think this is nonsense. I would be more productive being less productive.

But I also play the piano. I memorize everything I play. That way, one hand, either in counterpoint with classical music, or improvisation with jazz, can do one thing while the other is free. …


Cryptocurrency

5 stocks you can buy to get exposure to Bitcoin’s upside

Image by Gerd Altmann from Pixabay

You don’t have to buy Bitcoin to get exposure to the upside potential (and downside) in Bitcoin swings. You can buy stocks that are involved in Bitcoin mining and/or have a large percentage of their net worth in Bitcoin. Other stocks are involved in blockchain technology.

For example, this week Tesla (TSLA) announced it bought $1.5 billion in Bitcoin and would accept payment in Bitcoin. The company has about $20 billion in cash so this won’t make a huge difference in terms of its market value, which is $783 billion, as of Feb. 12.

However, analysts suspect a good number…


Cryptocurrencies

It’s likely to become a currency to buy things rather than hoard like Bitcoin

Woman holds a cryptocurrency Bitcoin
Woman holds a cryptocurrency Bitcoin
Picture from Kaboompics

There is a real difference between Dogecoin and Bitcoin and most other cryptocurrencies. It has a slightly inflationary supply structure, rather than a deflationary supply.

Here is what that means. Every year Dogecoin allows 5 billion Dogecoins to be mined. This lasts forever.

By contrast, Bitcoin and most other cryptocurrencies have a declining supply. In fact, by 2040 no more Bitcoin will be mined.

There are now 128 billion Dogecoin in circulation. As a result of its structure, we can map out its future performance, at least in terms of supply.

People Won’t Hoard DogeCoin Like They Do Bitcoin

For all intents and purposes, a major reason that…


Cryptocurrency

Ethereum is likely to make you richer

Woman smiling holding a Bitcoin cryptocurrency
Woman smiling holding a Bitcoin cryptocurrency
Photo by Moose Photos from Pexels

The three reasons why you should buy Ethereum over Bitcoin are:

  1. Ethereum has consistently outperformed Bitcoin;
  2. Moreover, Ethereum is still much cheaper on an absolute dollar basis, and
  3. I calculate that in roughly seven to eight years, the price of one Ethereum will equal the price of one Bitcoin.

1. Ethereum Has Consistently Outperformed Bitcoin

So far this year, as of Friday, Feb. 5, Ethereum (ETH/USD) is up 135.5%. On the other hand, Bitcoin (BTC/USD) is up just 28.67%. That means so far in 2021 Ethereum has risen 3.7 times faster than Bitcoin.

In the past year, Ethereum has outperformed Bitcoin. It has skyrocketed 734%, as…

Mark Hake

CFA, MBA, and former hedge fund manager and investment research firm owner. For fun, he plays classical / jazz piano, counts cards, and plays poker.

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