Chad's Sharebuilder IRA
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Created by jchadingram
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Date updated:06-28-2008

10% is a great gain, don't blow it//// Set stops behind 10 to 20% gains to protect profits. Quiting while your ahead is not the same thing as quiting.

Cash flow generation, debt-free balance sheets and a significant and sustainable competitive advantage in the marketplace are some of the reasons great companies stand out from the pack.


What is it that separates companies that thrive for decades from the ones that flounder for years?

The answer may lie in what is referred to as a company's economic moat, a phrase popularized by investing legend Warren Buffett. In this article, we'll introduce you to the concept and explain why it is so important to consider as a long-term investor.

What is an Economic Moat?
Economic moat refers to the character and longevity of a corporation's competitive advantage over similar companies competing in the same industry. If Company A is producing excess profits, competitors B, C and D will soon take note and attempt to enter the industry and do the same. As capital flows into the industry, the new competition will erode their profits, unless Company A has an advantage over its competitors.

An economic moat is a barrier that protects a firm and its profits from competing firms. Just like a medieval castle, the moat serves to protect those inside the fortress and their riches from outsiders. Without a wide economic moat, there is little to prevent competitors from stealing market share and thus profits.


Fast Growers

These companies have little debt, are growing earnings at 20% to 50% a year, and have a stock price-to-earnings ratio below the company's earnings growth rate. Investing in these types of stocks makes sense for investors who want to find solidly financed, fast-growing companies at reasonable prices.

Slow Growers

Here Lynch is looking for companies with high dividend payouts, since dividends are the main reason for investing in slow-growth companies. Among other things, he also requires that such companies have sales in excess of $1 billion, sales that generally are growing faster than inventories, a low yield-adjusted price/earnings-to-growth ratio, and a reasonable debt-to-equity ratio. Investing in these types of stocks makes sense for income-oriented investors.

Stalwarts

Stalwarts have only moderate earnings growth but hold the potential for 30%-to-50% stock price gains over a two-year period if they can be purchased at attractive prices. Characteristics include positive earnings; a debt to equity ratio of .33 or less; sales rates that generally are increasing in line with, or ahead of, inventories; and a low yield-adjusted price/earnings-to-growth ratio. Investing in these types of stocks makes sense for investors who aren't willing to pay up for high-growth companies but still want the chance to enjoy significant capital gains./////PEG ratio results greater than 1 suggest one of the following:

The market's expectation of growth is higher than consensus estimates.
The stock is currently overvalued due to heightened demand for shares.
PEG ratio results of less than 1 suggest one of the following:

Markets are underestimating growth and the stock is undervalued.
Analysts' consensus estimates are currently set too low./////Ignoring trading volume in ETFs can prove costly for investors.!!!

With a ShareBuilder Automatic Investing Plan you can:

• Invest any dollar amount on Tuesdays exclusive online
• Schedule investments on a weekly or monthly basis
• Select from our list of over 6,000 stocks and ETFs

Investments and funding instructions can be edited up to 5:00pm (ET) on the Monday before your purchase. Real-time trade fees apply to all sales/////PEG ratio results greater than 1 suggest one of the following:

The market's expectation of growth is higher than consensus estimates.
The stock is currently overvalued due to heightened demand for shares.
PEG ratio results of less than 1 suggest one of the following:

Markets are underestimating growth and the stock is undervalued.
Analysts' consensus estimates are currently set too low.

symbol name last price % change open
  • +
  • NM
    Navios Maritime
  • $9.25
  • +0.98%
  • $9.16

South American Shipping

People owning NM also tend to own: AFFXAKAMAUBAABBDBRCMCLR

TheStreet.com Rating: B What is this?

  • +
  • SIRI
    Sirius Satellite
  • $2.28
  • +8.57%
  • $2.13

Long trade!! Consider Selling after merger news.

People owning SIRI also tend to own: AMGNDAVEDKSMSFTPNRASHFLUTX

TheStreet.com Rating: D- What is this?

  • +
  • CHINA
    Cdc Corporation C
  • $2.75
  • +0.73%
  • $2.73

TRADE///// # 2 /////Chinese Internet & software management play. Blizzards will cause higher numbers as gamers are force inside for long periods of time. Keep a close eye out for earnings after Chinese New Year. I think I was too quick to let go of the stock while raising cash. I jumped back in and willl hold till they divest the software company and games division. Got in @ 4.20 and should buy more below $3.90. Consider selling @ $7.75/////CDC CORP. INITIATED AT BUY BY CANTOR FITZGERALD; PRICE TARGET SET AT $6/////CDC Corporation(GAAP) (CHINA.GP) /////Actual EPS for FY End (12/2006): 0.07 /////Current FY High EPS Estimate: -0.07 /////Current FY Low EPS Estimate: -0.14 /////Current FY Consensus Estimate: -0.10 /////Change from Previous Consensus Estimate: 0.00 /////Current P/E Ratio: NA /////P/E Ratio for Next FY: NA /////Current Industry P/E Ratio: NA /////52 Week High Price: NA /////52 Week Low Price: NA

People owning CHINA also tend to own: AAPLBLE.TOCTRPELR.TOEMUFCXFMCN

TheStreet.com Rating: D What is this?

  • +
  • GLD
    Streettracks Gold
  • $98.71
  • +0.38%
  • $98.03

streetTracks GOLD Trust!!!!!!!!!!Buy on BIG DIPS!!!!!!!!!!

People owning GLD also tend to own: AAPLBABENBMYCOSTGOOGIAAC

TheStreet.com Rating: No Rating What is this?

  • +
  • DBN
    Wisdomtree Intern
  • $35.25
  • -0.70%
  • $35.19

WisdomTree Trust International Basic Materials

People owning DBN also tend to own: BFKCHKCMCSACOPDFJEWTEWY

TheStreet.com Rating: No Rating What is this?

  • +
  • DEM
    Wisdom Tr Em Mkt
  • $51.06
  • -0.27%
  • $51.20

WisdomTree Trust Emerging Markets

People owning DEM also tend to own: ACORBACBGCHLCMEETFFXE

TheStreet.com Rating: No Rating What is this?

  • +
  • XOMA
    Xoma Ltd
  • $1.87
  • -5.08%
  • $1.99

Value Pharma

People owning XOMA also tend to own: APABACCCFCCSCOCSXCVS

TheStreet.com Rating: D What is this?

 

Start Price

Return Value

Start Date
SIRI 2.83 -19.43% Jan 19th
CHINA 3.82 -28.01% Jan 19th
GLD 98.71 0.00% Apr 17th
DBN 40.02 -11.92% Apr 17th
DEM 56.17 -9.10% Apr 17th
NM 9.60 -3.65% Jun 28th
XOMA 1.69 +10.65% Jun 28th

Average return:

 -8.36%

Success rate:

 28.57%

Deleted Stocks:
VCLK 19.41 -21.48% Jan 19th
CVS 36.92 -3.68% Jan 19th
UN 33.00 -3.09% Jan 19th
DXZLX 23.67 +25.35% Jan 19th
MCD 54.10 +8.48% Jan 28th
LYV 11.00 +37.73% Mar 22nd
PKD 8.93 +12.21% May 24th

Tracking Started: 01-19-2008

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