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Craig Guillot over at Mint.com had a great article about saving for a rainy day.  In his article, he points out several concerning facts. According to a 2011 survey by the National Foundation for Credit Counseling, 64% of Americans don’t have enough cash on hand to handle a $1,000 emergency.

To handle the crisis:

  • 17% of respondents said they would borrow from family or friends.
  • 17% said they would neglect existing obligations.
  • 12% said they would pawn or sell belongings.
  • 9% said they would get a loan from a cash advance store.

To be perfectly blunt and honest, $1,000 is not enough emergency cash if you are investing in the stock market. In my book, The Confident Investor, I suggest that you have 6 months of cash on hand. At an absolute minimum you should have 3 months.

If you save 10% of your income from your paycheck, it will take you 2.5 years to have 3 months of income saved in your emergency account. The longer you wait, the harder this becomes and the more important it is to accomplish. Jump over and read Craig’s article as it will give you some good ideas to set up your savings.

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Company name Atlas Energy LP
Stock ticker ATLS
Live stock price [stckqut]ATLS[/stckqut]
Confident Investor Rating Poor

The following company description is from Google Finance: http://www.google.com/finance?q=atls

Atlas Energy, L.P., (Atlas Energy) is an independent developer and producer of natural gas and oil, with operations in the Appalachian Basin, Illinois Basin and the Rocky Mountain region. As of December 31, 2011, its principal development and production assets consisted of working interests in approximately 8,500 gross producing natural gas and oil wells; royalty interests in over 500 gross producing natural gas and oil wells; net daily production of 35.9 million cubic feet equivalent per day; proved reserves of 167.6 billion cubic feet equivalent, and its partnership management business, which includes interests in 98 investment partnerships and a registered broker-dealer that acts as the dealer-manager of its investment partnership offerings. It maintains ownership interests in the entities, which includes Atlas Pipeline Partners, L.P. and Lightfoot Capital Partners, LP and Lightfoot Capital Partners GP, LLC. On February 17, 2011, it acquired certain assets from Atlas Energy, Inc.
Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock. It is not possible to confidently invest in a company that is not currently profitable.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.

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Earlier, I wrote about using the system described in my book, The Confident Investor, to build up your investment in Deckers Outdoor Corporation [stckqut]DECK[/stckqut]. I discussed how much your investment would have risen compared to the traditional method of “buy-and-hold” as an investment strategy.

At the time that I wrote the article, I hadn’t discussed portfolio management on my site to any great detail. Recently, I discussed the concept of doubling your investment to the point that the free stock is equal to one allotment of your portfolio. Now that this concept has been explained, I need to add another metric to the Deckers [stckqut]DECK[/stckqut] analysis.

If you would have invested in Deckers as described in that article, you would have doubled your investment by March 2, 2007. On that date, you would have acquired 150 shares of DECK which were valued at about $67.45 for a total profit of $10,101.75. This means your $10,000 initial investment would have doubled.

This event would have occurred 292 trading days after you initiated trading on DECK. If you followed my advice on portfolio management, you would stop trading in DECK at this point and focus on other stocks to build up equity in them.

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Company name Oracle Corporation
Stock ticker ORCL
Live stock price [stckqut]ORCL[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Poor
EPS growth Poor
P/E growth Poor
EBIT growth Poor

ANALYSIS

Confident Investor Rating Poor
Target stock price (TWCA growth scenario) $12.72
Target stock price (averages with growth) $20.2
Target stock price (averages with no growth) $24.77
Target stock price (manual assumptions) $24.71

The following company description is from Google Finance: http://www.google.com/finance?q=orcl

Oracle Corporation is a provider of enterprise software and computer hardware products and services. The Company’s software, hardware systems, and services businesses develops, manufactures, markets, hosts and supports database and middleware software, applications software, and hardware systems, with the latter consisting primarily of computer server and storage products. It is organized into three businesses: software, hardware systems and services. Its software business consists of two segments: new software licenses and software license updates and product support. Its hardware systems business consists of two segments: hardware systems products and hardware systems support. The Company’s services business consists of the remainder of its segments and offers consulting services, managed cloud services, and education services. On January 25, 2012, it acquired RightNow Technologies, Inc. (RightNow). On April 5, 2012, the Company acquired Taleo Corporation (Taleo).

 

Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.

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Company name News Corp
Stock ticker NWSA
Live stock price [stckqut]NWSA[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Poor
EPS growth Poor
P/E growth Fair
EBIT growth Poor

ANALYSIS

Confident Investor Rating Poor
Target stock price (TWCA growth scenario) $10.12
Target stock price (averages with growth) $17.93
Target stock price (averages with no growth) $22.35
Target stock price (manual assumptions) $20.68

The following company description is from Google Finance: http://www.google.com/finance?q=nwsa

News Corporation is a diversified global media company. The Company operates in six segments: Cable Network Programming; Filmed Entertainment; Television; Direct Broadcast Satellite Television; Publishing, and Other. Cable Network Programming produces and licenses news, business news, sports, general entertainment and movie programming for distribution through cable television systems and direct broadcast satellite operators. Filmed Entertainment engages in the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media worldwide. Television is engaged in the operation of broadcast television stations and the broadcasting of network programming . It engages in the direct broadcast satellite business through its subsidiary, SKY Italia. In November 2012, News Corporation, through a wholly owned subsidiary, completed acquisition of ESPN’s partnership interest in ESPN STAR Sports.

 

Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.