Tag Archives: cash flow

One Advisor’s Approach to Income Investing

Guest post by Contributing Editor, John Graves.

Editor’s Note:  John Graves has been an independent financial advisor for 26 years. He is one of the two owners of The Renaissance Group, a Registered Investment Advisor based in Ventura, CA.  John’s book, The 7% Solution: You Can Afford  a Comfortable Retirement, was published in 2012.  When I read this book, I was impressed with John’s approach and thinking and I recommend it as a good read.  I contacted John and asked if he would consider contributing to this blog.  After we bounced around some possible topics, he sent me the following piece that describes his process for designing income plans for retirees.  Continue reading

Lemons or Lemonade?

Guest Blog by Kip Robbins, CFA, Zacks.com.

This past Sunday it was 71 degrees and dry in Chicago.  If you’ve ever lived here in November, you know that’s an anomaly.  At this time of year, it’s usually 44 and wet.  I felt so warm, I decided to have a glass of lemonade which is usually reserved mostly as a summer treat.  As I sat on my porch enjoying the day with my beverage, it reminded me of the tale of two lemonade entrepreneurs.

The story itself is a little long, but here’s the summary.

There are two businessmen (Bill & Ted) that decide to setup lemonade stands.  Bill does everything with a just-in-time approach: buying only the amount of supplies and inventory he needs for each day.  Ted decides to buy everything for 100 days of lemonade sales up front, including a brand new stand. Continue reading

Investing like James O’Shaughnessy

In any field it’s fascinating to watch what the heavy weights are up to.  John Reese, founder and CEO of Validea and Validea Capital Management, (pictured) has spent the last 15 years studying history’s best investors and then building investment strategies based on that research. Among his “gurus”:  Warren Buffett, Peter Lynch, Ben Graham and others. In the August 20th, 2010 issue of his newsletter, the Validea Hot List, Reese takes an in-depth look at James O’Shaughnessy, an expert in quantitative stock modeling. O’Shaughnessy’s methods have inspired a Validea strategy which Reese says has averaged more than 8% annualized returns since its inception seven years ago, a period in which the S&P 500 has returned about 1.2% per year.

Below is a reprint of part of Reese’s write-up and a list of current stocks that score highly based on his O’Shaughnessy model. Continue reading