While the listing from CNN doesn’t include this site, I thought it was a good list for my readers to review.

Investing should be cheap, effective and easy. These products simplify your financial life.

  1. Robinhood
  2. Betterment
  3. Wealthfront
  4. Openfolio
  5. FeeX
  6. Estimize
  7. StockTwits (you can follow me on StockTwits at http://stocktwits.com/ConfidentInvest)
  8. Acorns
  9. Thinkorswim
  10. Forcerank

If you want to learn more about these apps, I suggest you follow this link.


Facebook [stckqut]FB[/stckqut] might be sending less traffic to publishers’ websites now than it did in January, or more traffic, or the same amount of traffic. It depends on who you ask.

In recent years publishers have increasingly relied on Facebook to drive users to their websites, and some sites now receive as much as 90% of their traffic from the social network.

But that trend has some media executives nervous. Facebook could begin to charge for the traffic it sends to their properties, they say, or give preference to content hosted directly on its network through features such as its Instant Articles initiative.

As a result, there’s a growing thirst for data about Facebook referral trends. Online measurement companies regularly release data aggregated from a selection of sites, which they say offers insight into Facebook’s systems beyond the experiences of individual publishers.

The problem is, those companies examine different groups of sites and use different methodologies to analyze their data, therefore arriving at very different conclusions.

Source: Is Facebook Driving Less Traffic to Publishers’ Sites?

My book, The Confident Investor, supplies most of the calculations that are used on this site. However, for this site I enhance the calculations a bit that may be confusing to understand if implemented in the book.

Enhanced TWCA

The first enhancement is to the Time Weighted Composite Average (TWCA). The calculation is nearly the same as used in the book except for one small addition.  I calculate the TWCA as described in the book and then average the TWCA with the average growth from 3-months ago, 6-months ago, and 12-months ago.

To do this I average the closing stock price of 5 days that are 88, 89, 90, 91, and 92 days earlier. As an example, lets say the price 88 days ago was $98, 89 days ago was $99, 90 days ago was $100, 91 days was $101, and 92 days earlier was $102. This would average to $100.  If the price today is $110 then the growth was 10% in 90 days.

I do this same logic for 180 days and 360 days. I combine all three average increases into combined average increase.  I then average that number with the TWCA that is calculated in the book.

I enhance the TWCA because for the website I want the TWCA to be a bit more responsive to current market conditions. This weights the stock action of the last 12 months much higher than growth 9 years ago. It also puts more weight on the stock price movement than just EBIT or Revenue growth.

Averages scenario

In my book, I encourage you to find three different price targets for the stock.  I do the same thing for the website but do it in a very automated way. I report 3 different calculations:

  1. Target stock price (TWCA growth scenario) – Calculates the expected stock price if the company continues to grow at a combined TWCA rate. The assumption is based on current EPS and current P/E. This is exactly as it is described in the book, “The Confident Investor”
  2. Target stock price (averages with growth) – Calculate the expected stock price if the company grows at an average of combined TWCA and the 5-year analyst’s prediction of growth. This metric also factors in the P/E and the EPS growing at the average combined TWCA growth rate. This calculation is intentionally extreme (either high or low) and is intended to show an absolute best (or worst) case example of what could happen in the long-term if growth is consistent.
  3. Target stock price (averages with no growth) – This analysis is similar to the one immediately above without the growth.

I recently discussed how I use Google Finance to do part of my "quick" analysis of a stock when a reader asks my advice. Typically, I receive these requests from Twitter (@ConfidentInvest) or via the Contact Me on this site. After I do the quick review of a company on Google Finance, I need to dig in a bit more before I give an opinion on the stock. Most of that work, I do on MSN Money.

As you can tell by the metrics I report in my analysis reports, I worry about the 10 year growth history of 4 major metrics:

  1. P/E
  2. EBIT
  3. Sales
  4. Profit

I also look at the ability of a company’s managers to manage their revenue and profitability as a function of the number of employees.



To find the 10 year history, go to 10-Year Summary on the left side of the page. Also go to Key Ratios and further select 10-YEAR SUMMARY across the top of that page. When I do a full analysis for my site, I enter these values into a spreadsheet and perform trend analysis that closely models the rate of growth. I call this deep analysis TWCA and will explain more about that technique in the future. However, for a quick response to a reader’s question, I will do a mental calculation that the values are growing at a fairly even pace over the past decade. My concern is a major change in the numbers (especially negative growth). If the growth is relatively consistent, then I assume that a Confident Investor can cautiously invest in the company.


I then quickly look at the revenue per employee and then income per employee. This is found in the Key Ratios section but under MGMT EFFICIENCY on the top. I want to compare these numbers to the averages in the specific industry as well as to the S&P500. Companies that have too little revenue or profit per employee may be out of control and be heading into a rough time. This isn’t an albatross, but it does give me some concerns. For instance, in the screen shot above, IBM is significantly lower than the industry as well as the S&P 500.

At this point, I can answer the inquisitor. On an email or Twitter response, it is usually not very definitive. For a quick look, I haven’t done the math to rate the stock as a Good Company, Fair Company or Poor Company. However, if my quick look is interesting, I will add it to my list of stocks to spend more time with and perhaps create an analysis here.

When I find a company that I like and have on my Watch List, I use my account on Fidelity to manage my investment. I am very open on my Disclaimer page that you can expect that I personally invest in companies that I find attractive. Other brokerage houses have similar tools that I am sure are quite good, but I really like Fidelity’s tools.  In a future post, I will write about what I do there. If you want to make sure that you don’t miss my posts, please follow me on Twitter (@ConfidentInvest), subscribe to the RSS feed of this site, or subscribe to the weekly digest email that is sent out on Monday.

I regularly get asked what tools that I use to analyze stocks. I am going to write about these tools in a series of posts. I want to clarify that I am not saying negative things about other sites and tools. In fact, I am sure that other tools can provide similar benefits and features.

When I first look at a company, I use two tools: MSN Money and Google Finance. I find that I can understand most of what I need to look quickly at a company with these two tools. I will first focus on Google Finance, and in a subsequent post, I will explore MSN Money.

I usually receive requests via Twitter (follow me @ConfidentInvest) or the contact form on this site. The request is usually something like, "What do you think of XYZ?" My first step when someone asks me about an unfamiliar company is to go to Google Finance. I can quickly determine the company’s profitability, the major competitors, and then review recent news that is affecting the stock.

If you have read my site for any length of time, you will notice that the company must be profitable if I am going to invest. This is extremely obvious at the top of the Google Finance screen. If the company is not profitable, then I am done. I reply to the inquiring individual not to invest in unprofitable companies because it is extremely difficult to be confident in their actions.

Google 3 month stock history

I set the trading history on the stock chart to 3 months on my first review. My goal is to determine the dividend history. I also check out some of the articles that may be relevant to the company. This only takes a few minutes, but it allows me to see if there is any news about the company that may be influencing price moves. Also, since my site is called Confident Investor, a 3 month history will give me some idea of the volatility of the stock.

Google Finance competitors listing

I then scroll down to the competitors. Do I know any of them? If I already invest in one of the competitors, I can do a comparison of the two stock histories. This gives me an idea if this new company is a better investment than the original company. I also do a quick comparison of the P/E between the competitors. If it is not in line, there may be a problem. If the P/E is too high compared to its competitors, I will need to figure out why investors pay a premium for this company. If the P/E is too low, why are they punishing the company? P/E is a excellent indicator to see if investors like or dislike a company.

Google Finance Description

Finally, I do a quick read of the Description of the company. I usually know what the company does , but this quick read confirms it.

This is my first review of the company. At this point, I may be able to inform the inquirer if I dislike the company , but I cannot tell if I like the company. To do that, I need to go to MSN Money – I will review that tool in a later post. Stay tuned.

If you want to be warned when I post about MSN Money, there are several straightforward ways to do this. You can subscribe to my feed in your news reader. You can also sign up for my weekly newsletter which will give you the articles for the week. Finally, you can subscribe to my Twitter account @ConfidentInvest.