In The Black Investing
In The Black Investing™ currently offers three exclusive model stock portfolios that have been developed employing "Operational Cash Flow" (OPS) metrics. These portfolios, the TRS 100 Large Cap, TRS 100 Mid Cap, and TRS 50 Small Cap, can be implemented through a flat-fee, unlimited trading, relationship with FolioFn, our recommended broker dealer (subscribers can use any broker they prefer or trade on their own).
EPS vs. OPS
Investors often use corporate EPS (Earnings per Share) reports as indicators in their decisions to buy, sell or hold stocks. Recent events have shown that reliance on these EPS reports carries a significant risk and that they may not be a true barometer of a company's financial health. A Harvard Business Review article, "The Earnings Game," June 2001, documents many of the problems inherent in "the earnings game." It conclusively shows how some businesses have been guilty of the "management of earnings." OPS (Operational-cash flow Per Share) cannot be manipulated and is a much more reliable indicator of a company's true health than EPS.
OPS is an acronym for "Operational-cash flow Per Share and is derived from a corporations' actual quarterly or annual Cash Flow Statement. The specific section is entitled "Cash Flow used or provided by Operations." OPS is calculated by dividing a company's Cash Flow from Operations by the total number of shares outstanding.
OPS was created to focus stockholders on the real values of a company as opposed to artificial values for EPS, CFPS (EBITDA) that can be produced by creative accounting.
The proprietary search and analytics system is used to select from a broad group of companies that exhibit strong financial fundamentals where OPS is consistently greater than Earnings Per Share (EPS) and where the selected companies realize consistent revenue growth. We analyze and monitor 1,801 data points for each of over 10,000 public companies, more than 200 industries and at least 12 sectors of the economy.
Selected companies are identified as "Healthy" by our OPS driven criteria and their stocks are then further analyzed and evaluated by our financial team. A Chartered Financial Analyst on our staff leads this process and determines which selected stocks will be included in the TRS 100 Large Cap, TRS 100 Mid Cap, and TRS 50 Small Cap portfolio selections.
The automated process monitors up to ten thousand stocks across all industry groups in the US public markets. Six hundred "Healthy" stocks are selected and further refined to approximately two hundred fifty stocks which ultimately are placed in one of our three Portfolios. The TRS 100 Large Cap and TRS 100 Mid Cap portfolios contain about 100 stocks each and the TRS 50 Small Cap Portfolio has about 50 stocks. The Portfolios are published for use by our subscribers through our web sites. In addition subscribers will receive free limited access to the OPS charts.
In The Black Investing™ Portfolios outperformed major indexes for the last two years for several reasons.
Utilizing Tool Verifiable Selection (TVS) to confirm stock selections: We provide our subscribers with the ability to verify our stock recommendations through a computerized graphics based fundamental research tool that is linked to the stock picks. This graphical interface would display a companies OPS ranking, its "Trendamentals" and other data. The end user is trained to know what to look for in terms of healthy or unhealthy companies and can visually understand why a company was selected. The system selects stocks based on pre programmed algorithms and is used as the centerpiece around which all investment decisions are made. TVS serves to automate the process of validating the quality of stock selection as well as justifying the stock selection. The investor can view TVS as proof the portfolio manager used due diligence in making the stock selections. The tool will also serve as a historical reference point, a tombstone as to why a company was selected. TVS creates more comfort for the investor and ease of investing.
Trendamentals: Is the display of historical and fundamental data in a graphical format so that trends can be spotted.
How To Achieve A Comfortable Retirement (At Any Age)
The Rule Of 72: The Rule of 72 states that 72 divided by the rate of interest gives you how long it will take for your money to double in value.
At the same time investment advisors typically encourage individuals to amass 20 times their annual salary to plan for a comfortable retirement. If you annual salary is $50,000 you would need $1 million in savings. If your annual salary is $100,000 you would need $2 million on savings.
Utilizing the rule of 72 we can easily determine that a 3 percent rate of return will double a $100,000 investment in 24 years. A 50 year old investor will have only $200,000 at age 74 based on an initial $100,000 investment making 3% returns per year.
Alternatively, a 50 year old investor will double an initial $100,000 investment in only 6 years at 12% returns per year.
A higher return combined with compounding is the secret to achieving significant growth over time. And these results are just as true for younger investors - a 30 year old's investment of $100,000 will double in just six years at a 12% return rate. Of course, if additional annual investment are added to the original principal - returns can be even greater over time.