The Sun's Financial Diary » Tools

Morningstar’s New Mutual Fund Quote Looks Good

Sun — Tue, 11 Aug 2009 00:44:19 +0000

I have mentioned a few time in the past that Morningstar is my primary tool when it comes to mutual fund research because, as far as I can tell, it has the broad coverage or mutual funds with the most comprehensive data of a fund. I even wrote about how to use Morningstar to research mutual funds a couple of years ago. In addition to mutual fund research, I also found its ETF research tool quite convenient, especially if I want to see performances of all ETFs on one single page.

Recently, Morningstar gave its mutual fund quote page a major face lift (actually the beta version of the new interface has existed for a while), resulting a much cleaner and user friendlier interface that doesn’t require many clicks on the page to get most of the information I want about a fund.

If you go to Morningstar and type in a fund symbol (here I use DODGX as an example), you will be led to the new fund quote page, which will show you basics of the fund you are interested in.

The fund’s most important data is prominently displayed on top of the quote page, above the navigation bar. Here, before you get into details of a fund, you will find everything you need to know about a fund: Fund price, day change, star rating, yield, total assets, load (load fund or none load fund), expense, turnover, status (open to new investors or closed), minimum initial investment, category, and investment style. In the old page, these information is scattered, some are even one different pages. This alone makes the new interface much easier for investors to research a fund.

The center of the page is a growth chart of DODGX against the fund category it belongs to (large-cap value) and the benchmark (S&P 500). Before, Morningstar only shows fund performance in a few pre-defined time intervals, such as 1-yr, 5-yr, and 10-yr. The new chart tool, using a scrollbar at the bottom of the chart, lets you define your own time interval and plot the chart seamlessly. Both Google and Yahoo Finance have used this technique a long time ago. I am glad that Moringstar is finally on board.

The next feature that’s new is the graphic display of Morningstar Risk Measures of the fund, including Risk vs. Category and Return vs. Category. I like the graph because, like the growth chart, it gives me a quick idea of how the fund compares with its peers. If I want to know a little more about the fund’s risk, I can use the Ratings & Risk tab on top of the screen to find the fund’s risk and return rating for the past 3, 5, and 10 years, as well as the fund’s risk statistics, such as R-Squared, Beta, and Alpha.

Right below the growth chart is Morningstar’s Take of the fund, which includes opinioin of Morningstar’s analysts, role of the fund in the portfolio, and the fund’s stewardship grade. For DODGX, it’s one of Morningstar’s pick and it can be a core holding in the portfolio. Moringstar has an overall grade of A for DODGX (range from A to F, wich A being the highest and F the lowest) for the fund’s stwewardship, which measures the manner in which the fund is run, the degree to which the management company’s and fund board’s interests are aligned with fund shareholders, and the degree to which shareholders can expect their interests to be protected from potentially conflicting interests of the management company. However, this part of the information is not free. To access Morningstar’s analyst reports and grade, you will have to become a Premium Member.

While the first half of the quote page uses more graphs to show the fund’s performance, risk, investment style, and asset allocation, the second half is more of numerical presentation. In this part, you will find a fund’s performance, top holdings, and top sectors, all given in hard numbers. The new addition to the page is the Dividend and Capital Gains Distributions of the fund, which I find is very useful. In the past, I sometimes found it was quite difficult to a fund’s distribution information (distribution date and amount) unless I own the fund. Now, I can get this information conveniently at Morningstar.

I have mentioned in the Morningstar research post that I also look at the fund manager’s tenure when researching a fund. n the interface, Morningstar not only shows the fund manager’s start date, but also the assets under management. Unlike performance data which tells you directly how the fund is doing in the past and how it compares with other funds in the same category, the fund’s management information is more subtle. Generally, the longer the manager has managed the fund, the better the fund’s past performance can be as an indicator (of course, past performance can never guarantee future return and DODGX is a perfect an example of how a fund with a long tracking record can uncharacteristically underperform its peers).

The fund quote page itself contains enough information to give you some quick ideas about a fund. In you want to get into the details, each section on the quote page has its own separate page, which is accessible from the top navigation bar.

Overall, I think the new Morningstar mutual fund quote page is a big improvement over the old one. Have you tried it yet?

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Morningstar’s New Mutual Fund Quote Looks Good

Morningstar’s New Chart Tool Is Impressive

Sun — Tue, 21 Apr 2009 03:33:15 +0000

Whenever I need data on mutual funds, whether it’s a fund’s expense ratio, risk measures, or return, I always go to morningstar.com. It has been my trust tool for fund research for year, not only for mutual funds, but for ETFs as well. Then yesterday when I went to Morningstar to get some data for a post I am writing, I noticed something that I didn’t see before: the new Morningstar Chart.

When researching stocks or mutual funds, you can find many free charting tools that get your job done, from simply plotting the change of prices and comparing with benchmarks, like what Yahoo Finance is offering, to analyzing an equity’s pattern from the technical analysis point of view, which is available at StockCharts.com. However, most of these free tools, while maybe good for stock research, are generally not for mutual funds. When checking a mutual fund, I want to know how the fund compares with its respective benchmark, rather than against the S&P 500. I would also be interested in seeing where the fund stands among its peers in the same category. These are not available on just any chart though.

Not the case with the new Morningstar chart.

As you can see from the above screenshot, the Morningstar chart has pretty much everything you need to know about a fund. In addition to what you usually get from other charting tools, the Morningstar chart also displays monthly Rolling Returns of a fund during the time period you select (under the Growth menu, which also include Growth and Price). If you are interested in knowing a fund’s performance, then there are many options under the Benchmark menu, where you can find a lot of benchmarks grouped into categories, such as Morningstar Category, Morningstar Indices, US Indices, Canada, Europe and Asia. For the example I show above, I compared Dodge & Cox International Fund (DODFX) against Foreign Large Value, where the fund belongs, and MSCI EAFE Index, which is the default, to get a sense of how DODFX stacks up. You may say that taht manyother free charting tools also let you compare the a stock or fund against benchmarks or indices. While that’s true, in most of the time you do need to know the name or symbol of the benchmark/index you want to compare with and that’s not an easy job for sure. With the Morningstar chart, it can all be done with just a few clicks.

Under the Event menu, you can add events like dividend distribution and Morningstar Star Rating to the chart, if those are what you want to know.

Anyway, I just started playing with the tool and already found it’s very useful, at least for mutual fund research (I didn’t try with stocks yet). I am glad that Morningstar has made it available, even though it’s still in beta. Considering the unique position Morningstar is in for mutual fund research, this new tool will make fund screening a lot easier. Go to Morningstar and see if you like it.

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Morningstar’s New Chart Tool Is Impressive

A Free Stock Analysis Tool

Sun — Wed, 28 Jan 2009 17:13:43 +0000

When I need to check some data, such as returns and historical prices, of stocks or mutual funds, I usually use free tools such as Yahoo Finance or Morningstar. For my simple needs, those tools are enough, though what they offer are quite limited.

INO Free Stock Analysis

Recently I was informed about another free stock analysis tool, the Instant Stock Analysis from INO (as I Know ). The tool is quite easy to use. To analyze a stock, you need to enter the symbol of the stock you are interested in (I use GOOG as an example), then your name and email address.

After waiting for a while (sometimes the wait could be quite long), the free analysis is delivered into my Inbox, which looks like the following. The report contains a score, developed based on pre-defined weighted formula for the Smart Scan Chart Analysis. The report also gives a short-term trend for the stock (Weak Downtrend for GOOG). Of course, the formula and the score are all developed by INO. If you use a different tool, you may have a different result, depending on what and how elements are weighted.

In addition to receiving the analysis report in email, you can also view it online by providing your email address (the one your provided when requesting the report). For the online version, you can play a little more with the chart.

I am not a heavy stock trader, so I am still trying to figure out exactly how to use the tool to improve my trade (hope it can ). What do you think of the Instant Stock Analysis tool? Check it out to see whether you like it or not.

Market Club Comprehensive Service

If you are an experienced trader and looking for other tools and resources to improve and further educate yourself, you probably won’t be satisfied with the free analysis tool. If that’s the case, then INO also have a premium service called Market Club, which is a paid service but much more comprehensive and with more benefits. For example, with the free Stock Analysis, you will receive one report with trend analysis when you request a report. Market Club members, on the other hand, will receive daily trend analysis report.

From the above screenshot, you can see that you can actually download the data or do further analysis, both functions are available for Market Club members. For the data download function, you will have the option to download the data in four different formats: from 1 Minute to Daily (click the following picture to enlarge for a better view).

To keep you up-to-date with your stocks (or your entire portfolio), you can use Market Club’s Smart Alert tool to send you email alert when an event is triggered. For example, you can set alert for your stock when Price Breakout Above, Price Breakout Below, Chart Analysis Up, Chart Analysis Down, or when the stock reaches a high or low (1 week, 3-week, 4-week, or 52-week).

And with Market Club’s Smart Scan tool, you can scan hundreds of stocks meeting certain criteria (click to enlarge following picture for details).

Finally, Market Club also offers members seminars and workshops on Forex, Option, and Stock trading, as well as other training and educational programs.

If you are interested in having an idea of what you will get from a Trade School workshop, take a look at the handout of Building High-Performance Trading Systems: What Works and What Doesn’t (PDF file) by Nelson Freeburg, editor of Formula Research, or listen to the recorded course

What do you think of Market Club? Of course, the above are just some brief introductions on what the Stock Analysis tool and Market Club can offer. There are a lot on INO.com for me to explore. Be sure to come back and check out what I find out on INO

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A Free Stock Analysis Tool

Another ETF Research Tool

Sun — Tue, 04 Nov 2008 18:57:25 +0000

As an investor of exchange traded funds (ETFs), I am always on the lookout for new ETF research tools to make researching and investing a little easier. In the past, I have discussed a few tools that I found, such as the ETF rating tool from XTF. And usually when I research an ETF, I first go to Morningstar where I can find some basic information about the fund if I know what I am looking for. Morningstar also has a huge list of all the ETFs available, which is quite convenient.

For Morningstar’s list, the problem is it can only group ETFs based on their investment styles, such as large-cap, small-cap, growth or value, etc., but not the investment “theme” of the funds (what the fund is investing in). For example, if I want to check out EFTs investing in water, I am going to have a hard time finding all the funds from Morningstar’s list. However, most of the time I do want to know all the funds investing in a certain industrial area so I can have an idea of what my options are. That would be nice.

Well, over the weekend I stumbled upon another tool that gives me just that. It’s from a website called ETFMarketPro. What it offers is a ETF Themes that I didn’t find anywhere else:

Everything is clearly categorized. Pretty neat, isn’t it?

And if I go to the Water category as I wanted, I can find a section about Water ETFs in general, as well as the top performers in this group. And of course, the list of all Water ETFs:

I am still exploring the site to see whatelse it has to offer, but so far from what I can see, I think it’s a decent tool. Try it and let me know what you think.

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Google Followed Yahoo in Offering Real-Time Stock Quotes

Sun — Tue, 03 Jun 2008 02:32:23 +0000

Not that it’s significant, but in case you haven’t noticed, Google Finance starts to offer real-time stock quotes for securities listed on the NASDAQ. What it means is that from now on, when you type in a ticker symbol in your Google toolbar, the quote you see will be real time, no more 20 minutes delay. Following is a screenshot I took at 3:00 this afternoon for the quote of BIDU.

Google’s free latest offer, however, is a little late and short of its rival, Yahoo, which started the service late last week with coverage of stocks listed on both NYSE and NASDAQ.

I really don’t understand the big deal behind delaying the quote by 20 minutes. If companies like Google and Yahoo have means to get free real-time quotes, they should make them available to users because for everyone who wants to make a trade based on the stock price, he/she already gets the real-time quote from his/her broker anyway. And for those who don’t care, whether the quote is real-time or delayed doesn’t make any difference.

Anyway, I am glad that Google and Yahoo make the real-time quotes available to everybody. It just makes two of my favorite financial tools more convenient.

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Google Followed Yahoo in Offering Real-Time Stock Quotes

Millionaire Calculator

Sun — Fri, 15 Feb 2008 16:17:04 +0000

Yesterday, I wrote a post on what it takes to become a millionaire, where I gave a table showing given your monthly savings and an annual rate of return, when you will have at least $1M assets (houses, cars, etc. are not included). While the table is quite straightforward, it’s not flexible enough. For example, it doesn’t consider how much one already has and the monthly savings options are limited.

To make it more usable, I made a small calculator that takes into consideration the money you already have. Of course, with the calculator, you can save whatever amount you want every month, assume whatever annual return you want and see when you will become a millionaire

Give it a try and let me know if you like it.

**Millionaire Calculator**
How much have you already saved?
How much do you plan to save every month?
Your expected annual return (%) is

Years needed to become a millionaire
Total assets you will have

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Using XTF’s Rating Tool to Research ETFs

Sun — Mon, 17 Dec 2007 16:00:09 +0000

A while ago, I had a post on using XTF’s ETF Finder to find ETFs that belong to the same sector. I like that tool because it allows me to see all the competitors of a particular fund and gives me all the information I need on one page.

Recently (less than two months actually), XTF, an investment firm that specializes in exchange traded funds (ETFs) investing, introduced another service, ETF Rating to help investors get a comprehensive view of a fund. The following is the screenshot of PowerShares Water ETF PHO.

XTF’s ETF rating consists of two parts: the structural integrity and investment metrics. According to XTF, the structural integrity measures the fund manager’s ability to mimic the fund’s underlying index. Though from a fund’s prospectus investors have the information about the fund’s correlation with the index it tracks, errors still exist and from time to time, the fund’s investment could drift aways from its underlying index. XFT’s structural integrity rating considers a ETF’s tracking error, expense ratio (ER), bid/ask ratio, market impact, concentration risk, efficiency and capital gains distributions to give a fund a score on a scale of 1 to 10.

The investment metrics rating looks at the fund’s long term investment performance by evaluating its yield, risk, and historical performance.

This part of the information may not be particularly helpful right now because most of the ETFs have very short history and the longest history is likely to be only one year or less. Thus the rating could be skewed by short-term fluctuation.

Combining the two ratings together, XTF will also assign an overall score to the ETF which is used to compares the fund to its peers, as shown in the picture below. Though the summary mentions that PHO belongs to a group of 9 funds with similar objective, exactly what those 8 funds are couldn’t be found from the rating page. Such information, however, could be very helpful for investors to select which fund to invest in.

Overall, I feel it’s a quite convenient tool to research EFTs. Basic information of a fund is presented in a way that I can easily find out what I want to know about the fund. Some of the information such as bid/ask ratio, tracking error and efficiency is not available at other ETF research sites such ETFConnect.com and Morningstar.com, making XTF quite unique.

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Got a Broker? BrokerCheck It before Using It

Sun — Wed, 26 Sep 2007 16:28:30 +0000

I am a do-it-myself person when it comes to investing. I do my own research and make my own investment decisions. I don’t use a broker or financial adviser.

However, if you want to get some professional help for investing/financial planning, it’s always good to know as much background information about the broker/adviser as possible before letting him/her handle your finance. Recommendations from friends and relatives are important in selecting the right broker. However, there is always some information (for example, any violations) that can’t be obtained from first hand experience and personal view sometimes is biased. If there’s any concerns regarding a broker, information about the broker’s working history that is presented as-is will be valuable to make your own decision on whehter that’s the person you want to work with.

There’s a tool that can give you some background information of a broker you have in mind. It’s the BrokerCheck from FINRA (Financial Industry Regulatory Authority), formerly NASD. From the description:

FINRA BrokerCheck is a free online tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. It should be the first resource investors turn to when choosing whether to do business with a particular broker or brokerage firm.

I used the tool to check one of my friends who is a registered broker and found very thorough information on his current registration, qualifications (industry exams passed), complete registration and employment history, and affiliation history. Information disclosed by BrokerCheck include:

regulatory actions, investment-related civil suits, customer disputes that contain allegations of sales practice violations against brokers, all felony charges and convictions, misdemeanor charges and convictions relating to security violations, and financial events such as bankruptcies, compromises with creditors, judgements, and liens.

Information on BrokerCheck report is generated from Central Registration Depository (CRD) and is up-to-date as broker, brokerage firm, or regulator is requited to submit a report within 30 days of an event.

Following is the screenshot (click to enlarge) of the summary of the convicted broker Frank Quattron. BrokerCheck can generate full report in PDF format as well (here’s a sample copy of Frank Quattron’s report).

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Analyze Mutual Fund Costs with FINRA’s Mutual Fund Expense Analyzer

Sun — Thu, 13 Sep 2007 14:40:58 +0000

When evaluating a mutual fund, one of the major factors I will consider is the cost of owing the fund, which includes sales charges (load, redemption fee, etc) and management fees (12b-1, administrative and management fees). Since I use Morningstar quite heavily in mutual fund research, it is my main source for a fund’s fee information.

If you go to Morningstar.com and enter a fund ticker symbol (for example, VFINX), then click the Fees & Expenses on the left, you can see a summary of the fund’s expenses

It basically contains all the information I need, how it’s not very flexible as I can only take what it gives me (such as the total cost projection for 3-, 5-, and 10-year holding periods). To get a customizable cost analysis and comparison, I like the Mutual Fund Expenses Analyzer from FINRA (Financial Industry Regulatory Authority, formerly NASDD).

The FINRA MFEA consists of two sections. In the first section, you can enter up to 3 funds (or ETFs) to do a cost analysis and comparison.

All you need to do is entering the fund’s ticker symbol (or select a fund family and enter some keywords) and do a Search. Fund that meets the search criterion will show up in the Fund window. In this case, I entered symbols VFINX and PREIX (T. R. Price Equity Index 500) as I want a head-to-head comparison of these two funds.

In the second section, I can enter a little more information on how I want to compare the expenses of these two funds. Available options include the Investment Amount, Rate of Return, and Holding Period.

After entering the details, the analyzer calculates the estimated expenses of these two funds based on the information I provided (shown in the following figure, click to enlarge).

I can also choose a graphic display of the analysis results as shown in the following plot.

Of course, the above comparison is based on the same set of assumptions, especially the annual rate of return (which is assumed to be 8% for both funds). This, however, is seldom the case in reality. If I want to compare funds with different returns, I have to get the expense of each fund one by one (without entering the second or third fund) and compare them manually.

As shown above, the best part of this analyzer is I can customize the data (I usually use a fund’s annualized return data from Morningstar as the rate of return) so the result can be closer to what I want. On the other hand, the Morningstar cost projection is based on a fixed rate of return since it shows

how much an investor would expect to pay in expenses–sales charges (loads) and fees–over the next three, five, and 10 years, assuming a $10,000 investment that grows by 5% per year with redemption at the end of each time period.

Obviously, using 5% annual return to calculate a fund’s expenses doesn’t necessarily make the estimate more accurate than using the fund’s past return though “Past return doesn’t guarantee future performance.”

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Calculating My Personal Rate of Return

Sun — Tue, 21 Aug 2007 13:59:10 +0000

I have been using Quicken to track my investments for many years and feel it’s a very convenient tool. However, the biggest problem I have with Quicken is that it treats reinvested dividends and capital gains as costs instead of gains. While this is true when it comes the time that I sell the investment if I sell it at all, it doesn’t help me in determining my personal rate of return (PRR) at present time. What I want is including all distributions as gains (they are realized gains from my investments after all).

So in addition to Quicken, which is for the only purpose of tracking transactions, I also use Excel spreadsheet to calculate my actual returns. Besides, since I do dollar-cost averaging throughout the year, the returns from the return from the fund report isn’t really what I get. The following is an example of the spreadsheet that I use to calculate my 2006 PRR of Dodge & Cox International Fund (DODFX).

Regular purchases

At the beginning of 2006, I had a total of 305.349 shares at $35.02 per share. Through out the year, I bought $100 of the fund on average every month and each time I made a purchase, I calculated:

Shares added: This is the number of shares purchased each time. For example, on 01/31/2006, $100 got me $100/$37.32 = 2.68 shares.
Total shares: The above purchase made the total shares I owned on 01/31/2006 at 305.349 + 2.68 = 308.029 shares.

The process continued each time shares were purchased.

Reinvested distributions

I don’t take any distributions as cash. Instead, they were all reinvested which, in turn, added more shares to my possession. And these extra shares will continue to generate dividends and capital gains in the future, with increasing impact on the overall returns.

On December 28, 2006, DODFX distributed dividend and short-term (ST) and long-term (LT) capital gains of a total $1.18 per share. At that time, I have accumulated 333.795 shares from regular purchases and the reinvested distributions gave me 333.795 * $1.18 / $43.62 = 9.03 shares.

Personal rate of return

At the end of 2006, the total shares I own increased to 345.114 as compared to 305.349 when the year began. The market value of my investment changed from $10,693.32 to $15,067.68. Of the $4,374.36 market value increases, $1,200 came from my own contribution. Thus, my personal rate of return for 2006 is

PRR = ($4,374.36 – $1,200) / $10,693.32 = 29.69%

Quite impressive

PRR and total return

If you check Moringstar’s data, you will find that the total return of DODFX in 2006 is 28.0%. How could my PRR be higher than the total return? The 28.0% total return is calculated based on the assumption that no additional purchase is made throughout the year (here’s my explanation of total return). The 305.349 shares remained the same until December 28th when distributions were made and the total shares after the distributions were 305.349 + 305.349 * $1.18 / $43.62 = 313.609. Now I can calculate the total return as

Total return = (313.609 * $43.62 – $10,693.32) / $10,693.32 = 28.04%

exactly the total return from Morningstar.

The value of dividend reinvestment

As it turned out that though I dollar-cost averaged in an upmarket (DODFC share price increased from $35.02 to $43.66), my PRR is till 1.65% higher than the total return. This extra return is solely due to the reinvested distributions from the additional shares bought priori to the payout. (check out this post for more details on DCA and dividend reinvestment) And as I keep adding shares throughout the year, the contribution from the reinvested distributions becomes more and more significant in terms of the overall returns. Thus, at the accumulation stage, reinvesting all the distributions is a better strategy for the long term growth.

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Some ETF Research Tools

Sun — Tue, 12 Jun 2007 15:10:03 +0000

Morningstar.com is my primary resource for mutual funds and ETFs research for its authority in the fund industry. I have used their ETF screening tool quite extensively when I was looking for ETFs for my taxable accounts. And for all the posts on ETFs I have written (for example, the Portfolio Build with ETFs series), I got most of the fund’s data, such as expense ratio (ER), return, and investment style, from Morningstar. However, there are a couple of things I found not very convenient from their list of ETFs:

No ER information
No separate lists for sector funds

It shows all the returns and trading volume, but if I want to find out the cost of each fund, I will have to click on each item and go to the fund’s separate page to get the information I want, which happens to be one of the most important data when evaluating a fund.

Then I recently found a couple supplemental tools that can give me most of the information I want without checking the funds one by one.

For all-in-one-page ER data, XTF ETF Finder is the tool I am now using. ETF Finder conveniently lists all the ETFs, by sector, style, asset class, or market cap, with their ERs. One drawback, however, is that I can’t sort the funds according to their ERs.

For some new ETF offerings (those having a few months of history), neither XTF nor Morningstar reports ER information. In this case, I will have to use the fund’s prospectus to see how much the fund will charge in fees. In addition, XTF also has Advanced ETF Screener.

Since I usually pay a great deal of attention to the fund’s yield, it would be nice if I can easily get distribution data from multiple funds for easy comparison. For that, I use ETF Connect’s ETF Sorter.

Here, funds are sorted by their distribution rates, so I can easily find out the fund’s yield in a single page.

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Picking Stocks Like a Guru

Sun — Fri, 08 Jun 2007 11:25:05 +0000

I never knew there’s a stock screening tools that identify stocks based on theories developed by the so-called investment gurus (somebody like Benjamin Graham) until I came across this article on Kiplinger’s Personal Finance last week.

Following the link in the article, I went on to check one of the tools, Guru Screener, at Nasdaq.com, which can be found on the left hand side in the middle of the page. I guess one of the reasons I never knew the tool is I only visited the Nasdaq website a couple of times several years ago, not sure if the tool was available at that time or not. Also, I only buy a small number of individual stocks (half of them are DRIP stocks) and don’t use any tool to select my targets.

Currently the screening tool includes the following gurus:

Growth/Value Investor: based on the work of James P. O’Shaughnessy
P/E Growth Investor: based on the work of Peter Lynch
Small Cap Growth Investor: based on the work of The Motley Fool
Momentum Investor: based on the work of Validea Momentum Strategy
Value Investor: based on the work of Benjamin Graham
Price/Sales Investor: based on the work of Kenneth Fisher
Contrarian Investor: based on the work of David Dreman
Growth Investor: based on the work of Martin Zweig

Of them, I have read the book, The Intelligent Investor*, by Graham and quite familiar with his value based approach. The tool also applies principles developed in the book to identify values stocks. Graham’s approach in the book can be summarized as:

Graham recommended buying stocks of large, prominent and conservatively financed companies with a long record of continuous dividend payments. He warned against stocks with price-to-earnings ratios of more than 25 times trailing seven-year average annual earnings, or more than 20 times their prior 12-months results. (He did that even though he knew it meant excluding growth stocks.) A true bargain, Graham insisted, was a company whose real value was at least 50% more than its stock price.

Applying Graham’s criteria, the screener returned about 45 stocks (including stocks listed on NASDAQ and NYSE).

I am not sure how valuable this tool is as when I want to buy a stock, I usually already have something on my mind and only use tools like Yahoo Finance or Morningstar to gather some data. If, however, I have no idea on what to buy, this tool can certainly help me narrow the initial range.

* Affiliate link

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Millionaire Index?

Sun — Sun, 13 May 2007 03:19:26 +0000

I never knew there’s a millionaire index until I read a piece news from Reuters. The index, The Spectrem Millionaire Investor Index, created by The Spectrem Group, isn’t really a measure millionaires’ wealth, but rather the sentiment of investors who have more than $500,000 or more assets in the household that can be invested.

The Millionaire Investor Index currently has a reading of 15 at the end of April, up 10 points from March. Reading of the index can indicate whether wealthy investors are bullish or bearish about the market. The current value of 15 is in the mildly bullish according to the Reuters news. The previous reading of 5 was in the neutral range, after the roller coaster month from late February to early March.

I don’t find this index particularly useful as it only focuses on a small group of wealthy people and how they perceive the market is different from our small investors because I feel they can tolerate more market fluctuations. When they say they are mildly bearish, I might already feel a bear market.

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Know Who’s Whispering What before Earning Release

Sun — Mon, 12 Feb 2007 19:33:38 +0000

Before a company releases its earning, financial research firms such as Thomson/FirstCall and Reuters survey fund managers and stock analysts to predict what the earning will look like. Stock prices usually move after the earning release, with magnitude depending on the outlook and how far away the true earning is different from consensus estimates. However, it’s not rare to see the stock moves lower even after the earning beats street estimate. The reason? There’s another number the earning doesn’t surpass: the whisper number.

If you are interested in knowing a stock’s whisper number before earning release, there are two websites which publish whisper numbers that are collected from traders:

Both sites have free service, which basically covers the whisper numbers, as well as paid services which include stock analysis and investor sentiments. Whispernumber.com offers a little more free stuff, such as whisper tracking and earning update. However, to get these free services, you need to register with them and the activation email they promised to send me after my registration never came! I have used three different email address to sign up and none got response from them. An email to their customer service regarding the registration process also seemed to fall on deaf ears.

Here’s an example how Dell’s whisper number looks like from Earningswhispers.com. The whisper numbers are helpful in getting investors sentiments about a company’s earning and future outlook beyond the view of the street, which is sometime biased. Despite the apparent usefulness of whisper numbers, it should only be part of the criteria that an investor needs to consider when making financial decisions.

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Original Post on The Sun's Financial Diary

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Know Who’s Whispering What before Earning Release

Morningstar’s ETF Selection Tool

Sun — Sun, 21 Jan 2007 22:32:50 +0000

When I was researching at Morningstar.com for small-cap investment (both mutual funds and ETFs) yesterday, I found their ETF selection tool quite convenient.

Simply place the cursor over the investment style you are interested in and click, then a list of ETFs in that category will appear with information such as style, returns, and trading volume.

However what’s missing from the list is what I consider one of the most important factors in determining which to invest for mutual funds: the expense ratio (ER). Though for ETFs, the ERs are generally lower than their mutual fund counterparts, they are still playing a key role when considering my investment choice, not just that the returns matter. In this case, I have to manually click on each ETF and go to their individual page to find out the ER.

The trading volume should also be considered, though it does not have directly impact on the returns of the fund, it affects how much you pay when buying the fund. Generally, the larger the trading volume, the smaller the bid-ask spread. The bid price is the highest price somebody is willing to pay to buy your shares if you want to sell them, while the ask price is the lowest price that someone is willing to sell a stock.

This tool is only available for domestic funds. For international equity ETFs, the list is much longer without detailed categorization.

Original Post on The Sun's Financial Diary

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Morningstar’s ETF Selection Tool

I Like The New Yahoo Finance Chart

Sun — Tue, 10 Oct 2006 21:17:58 +0000

I only discovered the new Yahoo Finance Chart yesterday and really like it. I used to go to place like BigChart.com for detailed, interactive charts, but now it seems I can get all I want from Yahoo.

What I like the most is the way I can change the time range. At the bottom of the chart, there is a menu "Time Range" and if I mouse over the menu, a small window with a slider pops up. To change time range, I simply move the slider and the chart in the main window changes immediately. Very smooth.

Original Post on The Sun's Financial Diary

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I Like The New Yahoo Finance Chart