Archive for September, 2009
One of my favorite and efficient ways to evaluate a company and its management is to look at insider trading. Insiders are officers and directors of the company. These are the leaders and decision makers in a business. They hold titles such as Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO), Director, President, and Chairman of the board. When they are buying up the stock of the company they own and manage this is an indication they are confident in themselves and their company. They would not be buying stock unless they believe it is undervalued and will increase in value sometime in the future. I especially like it when the CEO (the top executive) buys large amounts of stock in his company consistently. The CEO has more knowledge of himself or herself and of the company than anyone. If the CEO is selling stock on a regular basis, this is a huge red flag. If multiple insiders are selling stock, this is also a huge red flag. There is no explanation insiders can give me for multiple insiders selling. I am skeptical of everything people say. Sometimes insiders paint a rosy picture of the company while they are selling and give reasons why they are selling. I prefer to look at people’s actions. If insiders are buying, I am buying. If they are selling, I am selling.
When I buy stock, I am buying a piece of a business. I transfer money into the form of business assets. Business assets have many forms. Office furniture, inventory, cash, labor, branding, management, and technology are some of the forms. If I am able to transfer the business assets in the form of stock, back into money at a higher value, I just bought low and sold high. Every time a stock is purchased, either the buyer or seller made a good choice. The other made a bad choice.
Stock values go up and down due to the value of the underlying business and supply and demand for the stock. The value of a business is determined by its ability or potential to earn income and turn that income into increasing profits. Supply and demand is determined by the number of stock shares available for purchase and the number of buyers willing to purchase stock.
The Bible gives the secret to great gain. 1 Timothy 6:6
Now you don’t have to watch late-night infomercials about real estate.
In Mark chapter 8, Jesus fed 4,000 men with 7 loaves of bread and a few fish. He instructed His disciples to set the food before the people. What would have happened if His disciples didn’t begin handing out the food? NOTHING! They would have been standing there without enough food to feed everyone. When they finished giving, there was 7 baskets full of scraps left over.
If we believe the Word of God, our behavior should demonstrate that. Jesus fed 5,000 men with 5 loaves of bread. There were 12 baskets of scraps picked up afterwords. Then He fed 4,000 with 7 loaves.There were 7 baskets of scraps left over. There doesn’t seem to be a pattern here. If we believe Jesus did this, then we don’t have to figure out how to make the food in the food pantry last longer. He is never out of food. He just moves it around. Our offering should be to God. He will take care of the rest.
Why do we bring Spam and noodles to food pantries at our churches when we eat steak? I have nothing against Spam or noodles. A lot of people like Spam and noodles. If you eat Spam and noodles, take that to the food pantry at your church. That will please God. If you don’t eat that, take what you eat. God wants your first and best. He does not want leftovers.
God doesn’t need quantity. He wants quality.
Recently I have had conversations with a couple friends who like some of the concepts of communism. These are just concepts which have been proven not to work. The reason communism fails is because there is no motivation for success and no penalties for poor production. It simply promotes inefficiency and laziness. Hard productive work is not rewarded so there is no reason to work hard. Laziness is not penalized. Some people may think the theory is beautiful but it is simple to figure out why communism does not work and never will.
