John Dorfman Columns category, Page 3
John Dorfman: CEOs at 197 companies made big stock sales lately
Company insiders are ditching their own stock more than usual. An exception is oil and gas executives, some of whom are buying while their shares are depressed. To gauge insider sentiment, look at the ratio of buys to sells by top executives and large shareholders. According to Gurufocus.com, about 34%...
John Dorfman: Want to predict the economy? Well, then enter my derby
Terry Johnson, the winner of my Derby of Economic Forecasting Talent (DEFT) for 2024, likes to count trucks. Specifically, he counts the number of big rigs — 18-wheelers and the like — on a 45-mile stretch between Lincoln and York, Neb. More trucks means the economy is doing well. Fewer...
John Dorfman: How to make a terrible stock market bet
There are no sure ways to win in the stock market. But here’s a fairly sure way to lose: Invest in a stock that sells for 100 times revenue or more. The price/sales ratio for General Motors is less than one, for McDonald’s Corp. about 9, and for Microsoft about...
John Dorfman: 5 Balance Sheet Powerhouses I recommend
“Winning isn’t everything. It’s the only thing,” said football coach Vince Lombardi years ago. Many investors feel the same way about earnings. Excuse me, Lombardi disciples, but earnings aren’t the only thing. To withstand unexpected hardships or to seize timely opportunities, a company’s financial strength is also key. Once a...
John Dorfman: Bank of New York Mellon and Fox show value, momentum
Last year, momentum stocks were up 46%, growth stocks 36% and value stocks only 12%. As a longtime value investor, I find those figures (from S&P Dow Jones Indices) discouraging, yet also instructive. Let’s define our terms: • Momentum stocks are rising in price faster than the overall market. •...
John Dorfman: 6 cheap stocks with great 5-year returns
For years, my mentor, David Dreman, invested in Westinghouse Electric Co. The stock was cheap, often selling for about nine times the company’s per-share earnings. The stock price marched up nicely, yet the stock stayed cheap, because earnings were rising as fast as the stock price. That’s a value investor’s...
John Dorfman: Can analysts pick stocks? I doubt it
Can professional analysts pick stocks? Don’t laugh. Analysts perform many valuable functions. They ask probing questions of management, estimate earnings and provide a wealth of information on companies and industries. However, a study I’ve been conducting for a quarter of a century suggests they are no better at picking stocks...
John Dorfman: Robot Portfolio gained 22% in 2024
The Robot Portfolio returned more than 22% last year but was edged out by the surging Standard & Poor’s 500. Each year, the Robot — a naive stock-picking paradigm — generates a theoretical portfolio of 10 very unpopular stocks. The idea is that stocks advance by exceeding expectations, and low...
