1 whole wheat english muffin, or 2 slices Ezekiel bread - toasted
1/2 avocado, sliced and mashed slightly onto toast
1/2 tomato, sliced and placed on top of avocado
1 oz lowfat cheese or veggie shreds soy "cheese" - divided to top both toasts
sprinkle toasted sesame seeds and a bit of freshly ground sea salt on top
Toast slightly under broiler or in toaster oven until cheese melts slightly and seeds brown.

Serves two people, or one really hungry one.

Following is the breakfast I've been bringing to work every day lately. I don't get tired of it, it gives me a good pickup in the morning, and it's HUGE and complex enough that I'm not hungry again for about 4 hours, and it holds me through a workout two hours later.

1 Morningstar veggie "sausage" patty
1 hardboiled egg - organic, cage free, etc.
1 container Activia Nonfat yogurt. Any flavor, but I prefer peach.
1 whole piece of fruit, cut into bite sized pieces (peach, apple or banana) or 1 cup berries
1 cup mini wheats (frosted if you want a little bit of a splurge)

Eat patty, cold but thawed. Follow it with egg - the mixture of flavors is wonderful.
Mix yogurt, fruit and cereal in a large bowl and eat.
Have coffee if you feel the need. I often have 2 espresso shots over ice with a couple pumps of sugarfree vanilla syrup and a tablespoon of milk. It's wonderful.

I am the little boy, under and beneath,
I am the little girl, prim and proper.

I am the Devil's advocate, I am God's Archilles' heel,
Water under the bridge, best of both worlds.

I am the subtle hero, I am the overbearing coward,
Pay the piper, queer the pitch, lay down thy burdens.

Methods to my madness, motives behind my blunders,
I am the devil's tools, I am God's hidden truth.

Hell in a handbasket, head over heels,
I am in love, I am in chaos, I am.

" I am who I am" says God almighty, and the devil,
most despicable, says " Here is labor, here is toil."

I am the Roman Empire, I am Ceasar's flaming pride,
I am the midnight desert, calm and clear,
I am what you see, I am what you hear,

I am the substance of things hoped for, the evidence of things not seen,
I am the hope for the meek, the bitter regret of the prideful,
but if faith were easy.

Avoid mini caps and firms that trade on bulletin boards (or pink sheets); avoid firms that don't file regular financials with the SEC; avoid initial public offerings (IPO).

Has the company ever made an operating profits?...

Avoid promising (or young start-up) firms. For example: novel treatment abt some rare-disease, exciting new products that the world has never seen.

Does the company generate consistent cash flow from operations?

Are ROE consistently above 10%/12% with reasonable leverage?

Is Earnings growth consistent or erratic?

How Clean is the Balance Sheet?

Firms with a lot of debt require extra care because their capital structures are often very complicated. If a nonbank firm has a financial leverage ratio >4% - or a debt-to-equity ratio over 1.0 - ask yourself the following questions:

• Is the firm in a stable business? Firms in industries such as consumer products and food can withstand more leverage than economically sensitive firms with volatile earnings.
• Has debt been going down as a percentage of total assets?

Does the firm generate free cash flow?

Divide free cash flow by sales, and use 5% as a rough benchmark. Don't automatically write off firms with negative free cash flow if they have solid ROEs and pass the other tests in this chapter. Just be sure you believe that the firm really is reinvesting the cash wisely.

Is the firm has a habit of making one time charge?

Has the number of Shares outstanding increased markedly over the past several years?

If so, the firm is either issuing new shares to buy other companies or granting numerous options to employees and executives. If shares outstanding are consistently increasing by more than 2% - assuming no big acquisitions - think long and hard before investing in the firm.

However, if the number of shares is actually shrinking, the company potentially gets a big gold star.

Present value calculation is necessary because future value of money is worth less than current ones because:

1. Money we receive today can be invested to generate some kind of return, whereas we can't invest future cash flows until we receive them. This is the time value of money. Often represented by the interest rates being paid on government bonds.
2. There's a chance we may never receive those future cash flows, and we need to be compensated for that risk, called the "risk premium"

Discount rate = government bond rate + risk premium. Think of discount rate in this way: what rate of return would you need to make you indifferent between receiving some quantity of money right now versus at some time in the future?

Calculating Present Value (PV)

Example: find PV of $100 future cash flow. Using 10% discount rate

one year in the future = $100 / (1.0 + 0.1)

two years in the future = $100 / (1.0 + 0.1)^2

Determine Discount Rate

As interest rates increase, so will discount rates. As a firm's risk level increases, so will its discount rate. For interest rates, you can use a long-term average of Treasury rates as a reasonable proxy (10-year bond).

Riskiness factors:

• Size. Smaller firms are generally riskier than larger firms
• Financial Leverage. Firms with more debt are generally more riskier than firms with less debt.
• Cyclicality. Cyclical companies have higher risk.
• Management / corporate governance. Bad management is risky.
• Economic moat. the narrower the moat is, the riskier the stock.
• Complex Structure. The more complex an organization is, the riskier the stock.

As a base use 10.5%. If less risky, you can use 9%. If more risky, you can use 13% to 15%.

Calculating Perpetuity Values

We need a perpetuity because it's not feasible to project a company's future cash flows out to infinity, year-by-year, and because companies have theoritically infinite lives.

The most common way to calculate a perpetuity is to take the last cash flow (CF) that you estimate, increase it by the rate at which you expect cash flows to grow over the very long term (g), and divide the result by the discount rate (R) minus the expected long-term growth rate. In formula :

CFn (1 + g) / (R - g)

The result of this calculation then must be discounted back to the present value.

Price Multiples

A. Price-to-Sales (P/S)

P/S ratio = current price of the stock / sales per share

The good thing about P/S ratio is that sales are typically cleaner than reported earnings because companies that use accounting tricks usually seek to boost earnings. In addition, sales are not as volatile as earnings. Thus, P/S ratio useful for quickly valuing companies with highly variable earnings, by comparing the current P/S ratio with historical P/S ratios. Also the P/S ratio can be used when earnings are negative (P/E ratios cannot be calculated - indicated as N/A).

Biggest flaw: Sales may worth a little or a lot, depending on a company profitability. A company may post billions in sales, but still losing money.

B. Price-to-Book (P/B)

P/B ratio = stock's market value / book value (also known as shareholder's equity or net worth).

The main weakness for P/B is that there is increasing trend in intangible assets worth, which may limit the usefulness of P/B ratio. For service firms which depends on brand, dedicated employees, strong customer relationship, efficient internal process, P/B has little meaning.

P/B is tied to ROE (equal to net income / book value), in the same way that P/S is tied to net margin (equal to net income / sales). Given two companies that are otherwise equal, the one with a higher ROE will have a higher P/B ratio. Therefore, when you are looking at P/B, make sure you relate it to ROE. A firm with a low P/B relative to its peers or to the market and a high ROE might be a potential bargain, but you'll want to do some digging before making that assessment based solely on the P/B.

P/B is useful for valuing financial services firms because most financial firms have considerable liquid assets on their balance sheets. Financial firms trading below book value (a P/B lower than 1.0) are often experiencing some kind of trouble.

C. Price-to-Earnings (P/E)

The Good: accounting earnings are a much better proxy for cash flow than sales, and they're more up-to-date than book value. Moreover, it is readily available.

The easiest way to use a P/E ratio is to compare it to a benchmark, such as another company in the same industry, the entire market, or the same company at a different point in time.

The Bad: Relative P/E has one drawback, a P/E of 12, for example, is neither good nor bad in a vacuum. Using P/E ratios only on relative basis means that your analysis can be skewed by the benchmark you're using.

Risk, growth, and capital needs are all fundamental determinants of a stock's P/E ratio:

• higher growth firms should have higher P/E ratios,
• higher risk firms should have lower P/E ratios,
• and firms with higher capital needs should have lower P/E ratios.

When you're using the P/E ratio, remember that firms with an abundance of free cash flow are likely to have low reinvestment needs, which means higher P/E. Also:

• If a firm has recently sold off a business or perhaps a stake in another firm, it's going to have an artificially inflated E, and thus lower P/E.
• If a firm is restructuring or closing down plants, earnings could be artificially depressed, which would push the P/E up. For valuation purposes, it's useful to add back the charge to get a sense of the firm's normalized P/E.
• If the firm cyclical? Firms that go through boom and bust cycles - semiconductor companies and auto manufacturers are good examples - require a bit more care. Your best bet is to look at the most recent cyclical peak, make a judgment whether the next peak is likely to be lower or higher than the last one, and calculate a P/E based on the current price relative to what you think earnings per share will be at the next peak.
• Does the firm capitalize or expense its cash-flow generating assets? A firm that makes money by building factories and making products gets to spread the expense of those factories over many years by depreciating them bit by bit. On the other hand, a firm that makes money by inventing new products like drug, has to expense all of its spending on R&D every year. Arguably, it's that spending on R&D that's really create value for shareholders. Thus, the firm that expenses assets will have lower earnings - and therefore a higher P/E - in any given year than a firm that capitalizes assets.
• Which type of P/E? There are two kinds of P/Es-a trailing P/E, which uses the past four quarters' worth of earnings to calculate the ratio, and a forward P/E, which uses analysts' estimates of next year earnings to calculate ratio. In general, forward P/E < trailing P/E. Forward P/E also tend to be too optimistic.

D. Price-to-Earnings Growth (PEG)

PEG = P/E divided by its growth rate

The problem with this measure is that risk and growth often go hand in glove - fast-growing firms tend to be riskier than average. This conflation of risk and growth is why the PEG is so frequently misused. When you use a PEG ratio, you're assuming that all growth is equal, generated with the same amount of capital and the same amount of risk.

Don't just pluck your money to the one with the lower PEG ratio, look at the capital that needs to be invested to generate the expected growth, as well as the likelihood that those expectations will actually materialize.

E. Yield is good

earning yield = 1 / (P/E), or earning per share divided by its market price.

The nice thing about yield, as opposed to P/Es, is that we can compare them with alternative investments, such as bonds, to see what kind of a return we can expect from each investment.

The best yield-based valuation measure is cash return. Cash return = Free Cash Flow / Enterprise Value (Enterprise value is simply a stock's market capitalization + its long term debt - its cash). The goal of the cash return is to measure how efficiently the business is using its capital - both equity and debt - to generate free cash flow.

Essentially, cash return tells you how much free cash flow a company generates as a percentage of how much it would cost an investor to buy the whole company, including the debt burden.

BEWARE: Cash flow isn't terribly meaningful for banks and other firms that earn money via their balance sheets.

http://endtimespropheticwords.wordpress.com/

she must spend all day every day online carefully injecting every online article she finds with as many erroneous "prophetic"  interpretations as her twisted imagination can come up with

like  this piece of witchy nonsense bravo Miriam you've entered a great piece of fiction/fantasy for your readers

Rick Joyner of MorningStar - Neo Pagan Wiccan Connections

http://endtimespropheticwords.wordpress.com/2008/08/20/rick-joyner-of-morningstar-neo-pagan-wiccan-connections/

by the way Miriam I'm publicly calling you on the carpet for calling what Fresh Fires Ministries has explained as an EMOTIONAL INVOLVEMENT on Todd's part as an EXTRAMARITAL AFFAIR which suggests that his ministry is covering up a sexual affair and lying to everyone.  Furthermore you have a tag on this post called Todds drunkenness.  You publish innuendo as fact and are slandering Todd Bentley in order to promote yourself in an ungodly fashion.

A load of old bosh, perhaps, but just trying to develop a workable sytem for ball and chain flails, and flail and buckler. Not focussing on other types of flail, and not from sources, just playing

Definitions

By ‘meditations’ I mean guesses. References to flail in original sources consist of a small number of illustrations, mainly of the two-handed flail for use in armoured fighting.
I have chosen the term ‘morningstar’ flail, even though I am mainly looking at the use of a plain iron ball on a chain, because it sounds better.
I will initially cover the flail as used on its own, followed by flail and buckler use.

Why a flail?

The flail has the potential to inflict massive amounts of traumatic damage, but there is a trade off. The momentum causes problems we will look at in detail. Here's how to minimise disadvantages and maximise advantages.

The Hollywood flail

We all know how to use a flail. You spin it in circles around your head while advancing, or you spin it in vertical circles to one side of you, perhaps holding a shield forwards with the off hand, and lurch forwards to commit to a blow. It is popular knowledge one needs to do this to maintain the momentum.
Except… the effort involved to keep spinning a flog becomes wearing after a very short time, makes changing direction problematic, and every phase of spinning the flog, whether round one’s head or to one’s side, leaves one in a vulnerable position for 11/12’s of the circle just for that 12th part where the flog is travelling forwards.

Upper right position

So instead of spinning the flog clockwise round one’s head it would make more sense to hold it in a ready position above the right shoulder, from where it can be brought forwards to bosh diagonally down from the right, horizontally across from the right at mid level, or to bosh indirectly [over one’s head] diagonally down from the left.

If one looks at spinning the flog forwards in vertical circles to your right [anticlockwise from our perspective], the only useful position is the transitional moment when the flog is travelling forwards from the same ready position above the right shoulder. It looks as if in this ‘thumbing a lift’ position we have our first guard, ward, chambered position or ready position from which to bosh people. Let’s just call it ’upper right‘.

Lower right position

Let’s say we were to stand spinning the flog upwards in vertical circles to our right side [clockwise from our perspective], ready to rush forwards and bosh someone up under the chin. 11/ 12ths of the time we are in a vulnerable position, except for the moment when we are holding the flail down and slightly behind us about to bring it forwards and up - which is the only bosh we can make, because of the flog’s momentum.. If we treat this ‘tail guard’ as a ready position, we can indeed bosh diagonally upwards, or bosh horizontally from the right, or bosh down diagonally from the right. Hey, we can even swop hands behind the back and bosh from the left.
So now we have a ‘lower right’ position.

Upper left positions

The left side is a little different in practice.
Back to Hollywood flail use. If we spin the flail anti-clockwise [looking up] above our head, the flog come forwards from the left, our ready position is the moment when we’re looking over our elbow with our hand over the left shoulder and the flail still pointed behind. If we were to spin the flog downward in forward vertical circles [on our left side now], the ready position is pretty much the same, which we can call our ‘upper left’ position and which is perfect for boshing diagonally down from the left or for boshing at mid-level from the left. If we bring this position up slightly to look under our elbow [like a vampire hiding behind a cape] we maximise bringing the flog round in a compass to bosh down diagonally over from top right to bottom left.

Lower left position

If we were to spin it forward up from the ground in vertical circles we get the left version of the right tail guard , like when one is about to draw a sword from a scabbard at our sword belt, we have the ‘lower left‘ chambered position, perfect for boshing up diagonally from the left, or, again, at midlevel from the left.

Weaving between the left positions

If we move our arm slightly up and down between the three positions on the left - lower left, upper left and vampire - we can choose to commit to a blow or feint at any point..

Catches - the three catches on the left

OK, it will be apparent that moving between chambered positions is desirable, but it is problematic to do this quickly and without - and here’s one of the drawbacks of a flail - boshing yourself on the back of the head. The flog drags when shifting between positions, then gains momentum and is hard to stop. The obvious solution is to hold the chain just above the flog, and with this idea I would like to introduce the idea of catches. First of all on the left. The flog comes across after boshing from the right and - if travelling up - is caught in the upper left or vampire position, and - if going down - in the lower left position. Practice grabbing the chain just above the flog, not the flog, especially if it‘s spiked…Once held, moving between ready positions is much quicker, and the hand can add flinging motion to the next bosh.

The three right side catches

Nunchux catch

Now for catches on the right. There is no need to try to catch the flog in a lower right position/tail guard, as danger of hitting your legs in minimal. Catching on the upper right is different from the left as you will be making a ‘nunchux’ catch. Go to the upper right ‘hitching a lift’ position’, and reach under your right armpit to catch the chain just above the flog. So your left elbow is against the left side of your chest, left hand under right armpit, and the back of your right thumb rest on the top of your right shoulder. You could call it the ‘hmm’ position, since it’s like right elbow in your left hand, and having a ‘stroky beardy’ moment with your right hand.

Now practice using your left hand to move the flog over to your left side - into the left positions - and back to your stroky beardy position again.

Straight up catch

You can also make a catch by bringing the flog straight up, lower right to upper right, and bringing your left hand up to top right - as if dazzled by the sun - to make your catch. You then bring the flog down to go into the nunchacku position, or across or down to the left into your left [upper or lower] positions.

Armpit catch

The third catch is made by catching the flog behind [not in] your right armpit. Hold the flail in front of you and twist the haft to your left to make the catch. Practice flicking the flog forwards from there, then spinning the flog forwards in a circle to the right, and making the catch again. Think veeery carefully before doing this with a spiked flog.

There is also a catch behind the back. Do so. let go of the haft, swing to the left and catch it in front of you, and swing back to bosh.

Surprisingly all these catches and changes can be made with a buckler in the off hand with only a little practice, using a pincer movement with thumb and two forefingers to catch the chain around the handle of the buckler. It is easier than it sounds.
However a more practical approach is to use the outside of your own buckler to stop the flog, and it is here that the techniques begin to come into their own.

Stance and footwork

A quick word about stance and footwork, in passing. You can adopt a fencing stance, and accompany changes from one side to another with changing your lead foot to add momentum, or you can stand square on, feet at shoulder width, right foot forwards and right heel out slightly, using your hips for momentum. The first is more fluid but signals your moves more..

Strategies from these positions

From the left

Firstly, anyone facing a flail for the first time is probably going want to rush forwards and grab something. A flail isn’t sharp, so they will be looking to steam-roller you and grab your weapon. The ready positions on the left provide a flail shaft to grab, and the ready position on the right - the nunchux guard - looks cack-handed and awkward. Your opponant will want to try to get their hand or buckler against your apparently crossed arms. Think of yourself, then, as a fisherman, with both the flail and your seemingly vulnerable positions as bait.

First, techniques from the left positions. We’ve outlined the boshes already. You may also try striking forwards with the butt-end of the haft [keeping the chain taut], then stepping back and boshing. Also try grasping the haft in your right hand and the chain near the flog in the other to make a 'V',and stepping forwards while jabbing the end of the haft with the chain attached at your opponants throat once or twice, then stepping back and boshing. Of course if they turn their back, you know what to do with the chain, don’t you?
You may also try holding the flog or the chain near the flog and flinging the butt-end of the haft at their eyes, then grasping the butt and boshing. You are looking for a flinch, rather than damage, so as to make your bosh.

From the right

A word about the nunchux position, which I’ve also called ‘thumbing a lift’. It may feel awkward to you as well. Try letting go of the chain and putting your off hand on the haft too. It’s a classic posta di donna, and may give you some ideas on how to use it [It is also what I think of as parry six in backsword].

We’ve outlined the boshes from the right, and the possibility of changing across to the left positions. First, grasping the flog or the chain near the flog in the nunchux position, fling the butt end into their eyes, grasp the haft and bosh. These haft throws are again intended to get a flinch rather than damage, and are as effective as your speed in following with a bosh.
Another surprise move is to hold the flog - or the chain near the flog - and swing the haft up to their chin with your left hand, catch the haft in your right hand in a left-side nunchux catch [the left hand mirror of the right-hand one you started in], then either fling the flog in their eyes and follow with a bosh down to the head across your body - top left to bottom right - or by a simple bosh up to the chin from the left.

A vocabulary of boshes

So far we have just covered ready positions; with some techniques possible from them as well as using catches to facilitate moving between them.

We’ve touched on some of the basic boshes - diagonally down from both sides, diagonally up, and mentioned horizontal boshes at mid-level. To expand on those, practice swinging the flail from side to side at mid-level in front of you, lifting your left elbow when the flog comes to the left to save our arm being trapped. As you bosh, start pulling back just before striking. Practice with a pell. You will find that pulling back controls the rebound.

if you are using a buckler, practice the same horizontal swings at knee level - at a crouch, and apply the same pulling back technique.

Now experiment in making horizontal strikes from side to side above your head [the helicopter of death] and notice how you will need to make a small vertical circle at the end of the swing to be ready to strike again.
Now practice bringing the flog directly down top right to bottom right and either bring the flog out to the right using the elasticity of your arm to make a ‘false-edge’ strike from the right, or to swivel your torso round to the left and snap back to make a downward bosh top left to bottom left.

Practice thrusts and jabs, particularly from the underarm catch on the right.

If you are lucky enough to have a training partner with sword and shield, practice boshing directly up to the hands, under the buckler.

Two moves only possible with a flexible weapon are the drop strike and tennis serve. Essentially the flog is dropping or rising vertically and is flicked forwards.

Patterns

The grain of truth in the Hollywood flail is that it will be necessary at times to make transitional linking moves when changing your line, or multiple spins in multiple attention attacks - as you might in some sword work. We will be including the former here in these patterns, and both former and latter in more detail in the flail and buckler patterns in part two.

A routine, in several segments. The first segment strikes diagonally down from the upper right, up from the lower left, up from the lower right and down from the upper left.
To do this, start in upper right position. Bosh down to the opponent’s head, follow through, then bosh up to his chin from bottom left. The fancy bit is, just as your hand is up to the highest point on the right, bring your hand in a big arching circle up to the left above their head, down on the left of their head and coming diagonally top left to bottom right in front of their body to end in a tail guard.

following the ribbon up from it's lower left shows shows the boshing up to his chin from lower left, then making the shape of the ribbon in front of you, to end at the bottom right of the ribbon in a tail gurd.

I believe the term in taiji sword for these extra movements between strikes is 'making flowers', and are necessary here becuse the flog has too much momentum to catch after the upward blow. From the tail-guard bring the flog diagonally up from bottom right to strike their chin then allow to stop in the upper left position before boshing down onto their head top left to bottom right. End the swing with an forward moving anti-clockwise vertical circle [another flower here] on the right of your body, bring up to a top right chambered position ready to make the same pattern again.

The second segment is a strike top right to bottom left and mid left horizontally to mid right.
After the first short pattern, take your bosh as before, top right to bottom left, then do a vertical circle [pretty flower] on your left side - clock-wise, from your perspective - followed by a horizontal bosh from mid left to mid right, and either allow the flail to stop in an upper right ready position, with the flog hitting the haft, or bring your hand round in front of you in an aid's ribbon again to the tail guard.

For a third segment to add to the pattern, a helicopter of death with a flower in the middle. At the end of the first two segments, strike from tail-guard to upper left, boshing their chin on the way, bring the flog in a compass back round your head to bosh their ear from your right and around your head again to strike down on their crown from your right to end in lower left position, then the reerse side, diagionally up to their chin lower left to upper right, around your head in a compass to hit their other ear from your left, around your head to strike their crown from your upper left to end in a tail guard.

Now a fourth segment, to strike diagonally down from top right then top left, then diagonally up lower right and lower left, then horizonatally from both sides at mid level fiirst of all, then ear level, then knee level, followed by the same pattern starting from top left.
From the upper right position strike diagonally down to lower left and then down from upper left to lower right, making a vertical flower to your right [anti-clockwise] to end in a tail guard, strike diagonally up from lower right then up from lower left, making another flower as before and striking diagonally from mid right to mid left [with flail under your left arm], mid left to mid right and bring the flog in a compass behind your head to do an ear level strike [above your head] from the left and around again to bring diagonally top left to a lower right tail guard. Stop at lower right position and go diagonally up in front of you top left and make a compass round behind your head to strike at ear level with an horizontal bosh from the right, go round again and bring the flog down top right to lower left, crouching as you do so. Now make the same left right horizontal strikes as you did at mid level, and bring your arm in front of you in a flower from lower left to top right and lower left again, chambering top left to do the fourth sgment from the left this time.
.
Lastly, to end the complete pattern, bring the flog vertically up in front of you and either flick it forwards as it's rising or when it's falling again to make a tennis serve or drop strike.

Remember, these sorts of patterns are not for use in sparring but are very useful in training for knowing on a body-memory level how not to hit yourself. It is here that you will find a practice pell to be invaluable.

Feints 

Now the focus is on the first, second and third intention hits. You move between ready positions, perhaps using a catch first to facilitate this. There is no point standing in one position, then in another. Life’s too short.
But from whatever position you are moving through, you commit to a blow. Now if that position is undefended, follow through; - Bosh! If you see a better line opening then swing the flog short and use the momentum to bring it round from a different direction. Think Hope's new method. This is where the Hollywood stuff - the momentum - momentarily works. Your patterns [those above and whatever else you devise] will have drummed into you what boshes are possible from each position you find yourself in. I suggest you develop a very short repertoire of 'combos'; four to six combos at the very most, so as not to confuse yourself.

Constructing a practice flail

I use a flail with a 20-22” haft, 8-10” chain [including connecting loops at either end], and an half-pound rubber ball or, more carefully, a one pound metal ball. I'm working on heavier weights.
However a chain could be 6” or less [experiment to find what suits you - I have heard that a chain a third of the length of the haft is a good rule of thumb]. Balls for sparring need to be more heavily padded than just using rubber - though I wouldn‘t recommend a much lower weight, and masks need a stout back-plate. Elbows, throat, groin, solar plexus, collar-bone and knee protection is also a must.

Part two - flail and buckler tips, tricks and patterns; parrying with the flail; weapon entangles with the flail; the multi-balled flail; so you want to use two flails?

I. Declining Cash Flow

Over time, increases in a company's cash flow from operations should roughly track increases in net income. If you see cash from operations decline even as net income keeps marching upward - or if cash from operations increases much more slowly than net income - watch out. This usually means that the company is generating sales without necessarily collecting the cash, and that's BAD.

II. Serial Restructuring Charges

Be wary of firms that take frequent one-time charges and write-downs. This practice are open invitation to accounting hanky-panky because firms can bury bad decisions in a single restructuring charge.

III. Serial Acquirers

Firms that make numerous acquisitions can be problematic - their financials have been restated and rejiggered so many times that it's tough to know which end is up.

IV. The Chief Financial Officer or Auditors leave the company

V. The Bills Aren't Being Paid

Look for recorded income, but the customer paid on loose credit. Or in other words no cash - the customer has not yet paid for the product. You should track Account Receivable (A/R) relative to sales. On credit front, watch the "allowance for doubtful accounts". If this amount doesn't move up in sync with A/R, the company may be artificially boosting its results by being overly optimistic about how many of its new customers will pay their bills.

VI. Gains from investment

By itself is legal. However, the problem arises when companies try to boost their operating results - in other words, the performance of their core business - by shoehorning investment income into other parts of their financial statements.

VII. Pension Pitfalls

If a company winds up with fewer pension assets than pension liabilities, it has an underfunded plan. If a company has more than enough pension assets to meet its projected obligations to retirees, it has overfunded plan.

To examine a company's pension plans, you need to zoom at several items on the footnotes of a 10-K filing, and look for the note labeled "pension and other postretirement benefits," "employee retirement benefits," or some variation. Then look at the line labeled "projected benefit obligation." This is the estimated amount the company will owe to employees after they retire. Compare this with the line labeled "fair value of plan assets at end of year."

• If benefit obligation > fair value of plan assets then the company has underfunded pension plan and is likely to have to shovel in more money in the future, reducing profits.

VIII. Pension Padding

Pension-related income is a strange kind of profit. It's not available to pay out to shareholders - it belongs to the pension plan. This income is not reliable, and you should subtract it from net income when trying to figure out just how profitable a company really is.

Go to the line in the pension footnote labeled either "net pension/postretirement expense," "net pension credit/loss," "net periodic pension cost," or some variation. Companies usually break out the contribution of pension costs to profits for trailing three years.

IX. Vanishing Cash Flow

You can't count on cash flow generated by employees exercising options. The amount is labeled "tax benefits from employee stock plans," or "tax benefits of stock options exercised" on the statement of cash flows.

X. Overstuffed Warehouses

When inventories rise faster than sales, there's likely to be trouble on the horizon.

XI. Change Is Bad

Another way firms can make themselves look better is by changing any one of a number of assumptions in their financial statements. Some of the things that can be changed:

1. Firm's depreciation expense. The longer the depreciation period, the smaller the annual hit to earnings.
2. Allowance for doubtful account. If allowance for doubtful accounts doesn't increase at the same rate as accounts receivable, a firm is essentially saying that its new customers are much more creditworthy than the previous ones - which is pretty unlikely.

XII. To Expense or Not to Expense

Companies can also fiddle with their costs by capitalizing them. Operating costs - such as office supplies, office rents, and so forth are expensed because they produce a short-term benefit. On the other hand, costs such as a new piece of machinery are capitalized - that is, their value is recorded as an asset that slowly declines in value over time - because they produce long-term benefits.

I. Growth.

Sales growth is more important than earning growth. Sales growth is more difficult to fake. In general, sales growth stems from one of the four areas:

1. Selling more goods or services
2. Raising prices
3. Selling NEW goods or services
4. Buying another company. This is low quality growth.

II. Profitability.

Comparing cash flow from operations to reported earnings per share is another good way to get a rough idea of a firm's profitability because cash flow from operations represents real profits.

Two tools for assessing corporate profitability are return on capital and free cash flow.

Net margin = net income / Sales. It tells us how much of each dollar of sales a company keeps as earnings after paying all the costs of doing business.

Asset turnover = sales / assets. It tells us roughly how efficient a firm is at generating revenue from each dollar of assets.

ROA = Net Margin x Asset Turnover. It tells us the amount of profits that a company is able to generate per dollar of assets.

Think of ROA as a measure of efficiency. Companies with high ROAs are better at translating assets into profits. ROA helps us understand that there are two routes to excellent opertational profitability: (1) You can charge high prices for your products (high margins), or (2) you can turn over your assets quickly.

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Financial leverage = Assets / Shareholders' equity. It tells us how much debt a company carries, relative to shareholders' equity.

Return on Equity = Return on Assets x Financial Leverage.

In general, any nonfinancial firm that can generate consistent ROEs > 10% without excessive leverage is at least worth investigating. Additional two caveats when you're using ROE to evaluate firms: (1) Banks always have enormous financial leverage ratios, so don't be scared off by a leverage ratio that looks high relative to a non-bank. (2) for banks, look for consistent ROEs >12%.

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Free Cash Flow = Cash Flow from operations - Capital Spending. Any firm that's able to convert more than 5% of sales to free cash flow - just divide free cash flow by sales - is doing a solid job at generating excess cash.

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One good way to think about the returns a company is generating is to use profitability matrix.

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Return on Invested Capital (ROIC)

It is a better measures than ROA and ROE. It removes the debt-related distortion that can make highly leveraged companies look very profitable when using ROE.

Higher return on invested capital is preferable to a lower one.

III. Financial Health.

In addition to financial leverage, make sure to examine a few other key metrics:

• Debt to Equity = long-term debt divided by shareholder's equity.
• Times Interest Earned. Earnings before interest and taxes (EBIT) - look up pretax earnings and add back interest expense. Divide EBIT by interest expense, and you'll know how many times (hence the name) the company could have paid the interest expense on its debt. The more times that the company can pay its interest expense, the less likely that it will run into difficulty if earnings should fall unexpectedly.

Calculate the ratio (EBIT / interest expense) for the past five years, and you'll be able to see whether the company is becoming riskier - times interest earned is falling - or whether its financial health is improving

• Current ratio = current assets / current liabilities, simply tells you how much liquidity a firm has - in other words, how much cash it could raise if it absolutely had to pay off its liabilities all at once. As a very general rule, a current ratio of 1.5 or more means the firm should be able to meet operating needs without much trouble.

• Unfortunately, some current assets, such as inventories might worth less. So there's an even more conservative test of a company liquidity, the quick ratio = (current assets - inventories) / current liabilities. In general, a quick ratio higher than 1.0 puts a company in fine shape, but always look at other firms in the same industry to be sure.

IV. Risks/Bear Case

Be a skeptic, think WHY the stock is unloved or unpopular. It could be a valid case.

V. Management.

Divide into three parts: (1) Compensation (Be careful on exorbitant salary package, reduce corporate profit target for senior management, reward management for consummating an acquisition); (2) Character (Are there family members among boards, candor - esp in letter to shareholder statements, self-promotional / CEO paints himself as latter-day saints, key officers turnover); and (3) Operations (did the management follow through their plans?, self-confidence for long term prospects).

There are three financial statement that you need to take note:

1. The balance sheet is like a company's credit report because it tells you how much the company owns (assets) relative to what it owes (liabilities) at a specific point in time. It tells you how strong the framework and foundation of the business is. It must be balanced at all times: Assets = Liabilities.
2. The income statement, tells how much the company made or lost in accounting profits during a year or a quarter. Unlike the balance sheet, which is a snapshot of the company's financial health at a precise moment, the income statement records revenues and expenses over a set period, such as a fiscal year.
3. The statement of cash flows, which records all the cash that comes into a company and all of the cash that goes out.

Look at the statement of cash flows first when evaluating a company to see how much cash it's throwing off, then look at the balance sheet to test the firmness of its financial foundation, and only then look at the income statement to check out margins and such.

Further details:

I. The Balance Sheet

• The basic equation underlying a balance sheet is: Assets - Liabilities = Equity.

• Current Assets = those likely to be used up or converted into cash within one business cycle, usually defined as one year. This includes: (a) Cash and equivalents and short-term investments; (b) account receivable

Comparing the growth rate of accounts receivable with the growth rate of sales is a good way to judge whether a company is doing a good job collecting the money that it's owed by customers.

; (c) inventories. Look for inventory turnover = cost of goods sold (cost of revenue) / inventory level.

• Noncurrent Assets = assets that are not expected to be converted into cash or used up within the reporting period. This includes: (a) property, plant, and equipment (PP&E). If we compare these number to the firms' total assets, we can get a feel for how capital-intensive the firms are; (b)investment; and (c)intangible assets.

• Current Liabilities = money the company expects to pay out wihin a year. This includes: (a) account payable; (b) short-term borrowings or payables.
• Noncurrent liabilities = They represent money the company owes one year or more in the future. This includes: long-term debt.

• Stockholders' Equity. The only account worth looking at is retained earnings = profits - dividends and stock buyback. It is a cumulative account. Think of this account as a company's long-term track record at generating profits.

II. The Income Statement

In a 10-K, you'll usually see the income statement labeled as the "consolidated statement of income" or the "consolidated statement of earnings". Important line items in the income statement indicated below:

• Revenue, sometimes labeled as sales.
• Cost of Sales = Cost of goods sold
• Gross profit = revenue - cost of sales. Once you have gross profit, you can calculate a gross margin, which is gross profit as a percentage of revenue. Essentially, this tells you how much a company is able to mark up its goods.
• Selling, General, and Administration Expenses (SG&A). Also known as operating expenses. You can get a feel for how efficient a firm is by looking at SG&A as a percentage of revenues - a lower percentage of operating expenses relative to sales = a tighter, more cost-effective firms.
• Depreciation and Amortization
• Nonrecurring Charges/Gains. Ideally, you'd want to see this area of income statement blank most of the time.
• Operating Income = revenues - cost of sales and all operating expenses.
• Interest Income/Expense
• Taxes.
• Net Income. It is the company's profit after all expenses have been paid. This figure is less important than cash flow.
• Number of Shares (Basic and Diluted). Ignore basic shares. Diluted shares, however, include security that could potentially be converted into shares of stock, such as stock options and convertible bonds.
• Earning per Share (Basic and Diluted). This number represents net income = number of shares.

III. The Statement of Cash Flows

The cash flow statement is divided into three parts: cash flows from operating activities, from investing activities, and from financing activities.

From Operating Activities:

• Tax Benefit from Employee Stock Plan. Employee compensation is generally tax deductible.
• Net cash provided by operating activities. Also known as operating cash flow. Pay attention to this figure.

From Investing Activities:

• Capital Expenditure. It represents money spent on items that last a long time, such as PP&E. Free Cash Flow = Opearting Cash Flow - Capital Expenditure.

From Financing Activities:

• Issuance/Purchase of Common Stock. It indicates how a company is financing its activities.
• Issuance/Repayment of Debt. It indicates whether the company has borrowed money or repaid money it previously borrowed.

When not to sell a stock:

1. The Stock has dropped
2. The Stock has skyrocketed

When to sell a stock:

1. Did you make a mistake?
2. Have fundamentals deteriorated?
3. Has stock risen too far above its intrinsic value?
4. Is There Something better you can do with the money?
5. Do you have too much money in one stock?

Seven mistakes to avoid:

1. Swinging for the fences. This means that buying risky stocks (like small caps), finding the next Microsoft when it's still a tiny start-up is next to impossible.
2. Believing that it's different this time. History does repeat itself, bubbles do burst, and not knowing market history is a major handicap.
3. Falling in love with the products. For example: Palm was the first company to invent a handheld organizer that was relatively easy to use and affordable, but consumer electronics is simply not an attractive business. Margins are thin, competition is intense, and it's very tough to make a consistent profit.
4. Panicking when the market is down. In the words of Sir John Templeton, "The time of maximum pessimism is the best time to buy.
5. Trying to time the market.
6. Ignoring valuation. The only reason you should ever buy a stock is that you think the business is worth more than it's selling for - not because you think a greater fool will pay more for the shares a few months down the road.
7. Relying on Earnings for the whole story. Cash flow is what matters, not earnings.

If operating cash flows stagnate or shrink even as earnings grow, it's likely that something is rottern

Economic Moat - What makes great company great.

To analyze a company's economic moat, follow these four steps:

I. Evaluate the firm's historical profitability.

• Look for line item labeled "cash flow from operations" and subtract with "capital expenditure".
• Next, divide free cash flow by sales (or revenues), which tells you what proportion of each dollar in revenue the firm is able to convert into excess profits.

If a firm's free cash flow as a percentage of sales in around 5% or better, you have found a cash machine.

• Look for Net Margin = Net income as a percentage of sales.

Firms that post net margins > 15% are doing something right

• Look for Return in Equity (ROE) = net income as a percentage of shareholders' equity, and it measures profits per dollar of the capital shareholders have invested in a company.

Firms that are able to consistently post ROEs above 15% are generating solid return on shareholder money.

• Look for Return on Assets (ROA) = net income as a percentage of a firm's assets, and it measures how efficient a firm is at translating its assets into profits

Use 6% to 7% as a rough benchmark

II. If the firm has solid returns on capital and consistent profitability, assess the sources of the firm's profits.

The key question here is : WHY. Why no competitor on horizon?, why customer keep on accepting price increase?

In general, there are 5 ways that an individual firm can build sustainable competitive advantage:

1. Creating real product differentiation through superior technology or features (NARROW MOAT).
2. Creating perceived product differentiation through a trusted brand or reputation (DEEP MOAT).
3. Driving costs down and offering a similar product or service at a lower price. This especially works in commodity industries, in which products are tough to differentiate. Also, it worth to mention that firms can create cost advantage by either inventing a better process (e.g. Dell) or achieving a larger scale / economy of scale (e.g. Intel). (DEEP MOAT)
4. Locking in customers by creating high switching costs. You can make it difficult in terms of either money or time for a customer to switch to a competing product. Ask the following questions: (a) need significant amount of client training?; (b) tightly integrated into customers' businesses?; (c) is it industry standard?; (d) is the benefit to be gained from switching small relative to the cost of switching?; (e) any long term contract with client? (DEEP MOAT)
5. Locking our competitors by creating high barriers to entry or high barriers to success. The most obvious way to lock out competitors is to acquire some king of regulatory exclusivity, like licenses, patents. A much more durable strategy for locking out competitors is to take advantage of the network effect like e-bay, western union. (DEEP MOAT)

III. Estimate how long a firm will be able to hold off competitors. Some can do it in years, some in months.

IV. Analyze the industry's competitive structure. Hint: Use porter five forces.

Speaking of the volatility of our Spirit-filled brethren, Boston Vineyard pastor Dave Schmelzer provides a balanced take on the Lakeland revival, and Brother Maynard gives us a good (though difficult) account of the it and the Bentley's marital separation. Let's pray for the Bentleys, Lakeland Florida, the unity of the Church, and for all God's people to cultivate a healthy appreciation for the beautifully subversive and transformative nature of both God's power and God's ideas (teaching, Scripture, doctrine...however you want to put it).

1. What does the fund own?
2. How has the fund performed?
3. How risky has the fund been?
4. Who runs the fund?
5. What does the fund cost?

To evaluate "what does the fund own", you can employ morningstar investment style box, explained below:

Morningstar investment box for stocks (equity)

Other than placing mutual fund on investment style box, you also need to examine sector weighting.

If all the funds in your portfolio heavily concentrate their holdings in a certain supersector, it can be a strong indication that your portfolio needs exposure to other parts of the economy.

The next thing you need to check is to examine number of holdings. The more stocks a fund has, the less volatile a fund is. The opposite is also true.

A fund's turnover rate is another important factor when you're judging a fund's style. Turnover rates measure how much a portfolio has changed during the past year and shows approx how long a manager typically hold a stock. For example: a fund with a turnover rate of 100% has a typical holding period of 1 year; a fund with 25% turnover holds a stock for four years on average. Manager who keep turnover low often practice low-risk strategies, whereas high turnover funds can be aggressive and much riskier.

Look for those funds whose turnover rates are lower than 50%, preferably much lower.

Morningstar investment box for bond

The two axes of the bond style box are interest-rate sensitivity (or duration: Short, Intermediate, and Long) and credit quality. Knowing a bond fund's interest-rate sensitivity helps you determine how much it will react when interest rate go up or down. When interest rate go up, that typically depresses the price of already-existing bonds, particularly those with longer maturities, because investors would rather buy a newer bond with a higher interest payment, or yield, than get locked into a long-term bond that happens to have a lower yield.

Because it's a measure of time, duration is expressed in years. As a general rule of thumb, every one percentage point change in interest rates will cause a fund to gain or lose the amount of its duration. For example, a bond fund with a duration of 8 years is apt to lose 8% od its value if interest rates go up by one percentage point. Morningstar classify bond funds's duration:

• duration <= 3.5 years as short term
• 3.5 years < duration <= 6 years as intermediate term
• >6 years as long term

Morningstar classify bond funds's credit quality:

• AAA or AA to be high quality
• < AA but >= BBB to be medium quality
• < BBB to be low quality

Understanding RISK

• Standard Deviation - a measure of volatility. Use this within a context, i.e. compare with the fund's index standard deviation.
• Risk/Reward. Theoretically, a fund with extremely high returns year in and year out could have a standard deviation just as high as one that had posted fairly steep losses.

Fund analysis companies also describe a mutual fund's risk using three concepts from Modern Portfolio Theory:

1. Alpha. It is a measure of a fund's excess return relative to a market index. A positive alpha means the fund manager produced a higher return than the benchmark, while a negative alpha shows the fund did not get enough reward for the amount of risk it took.
2. Beta. It measures the sensitivity of a fund's returns to the returns of a market index. A beta coefficient of more than 1.0 shows the fund's return are more volatile than the benchmark index, which is assigned a baseline beta of 1.0. A beta of between zero and 1.0 shows the fund is less volatile.
3. R-Squared. R-squared measures whether the fund's price movements are correlated to the benchmark index on a scale from one to 100. A fund that mirrors the movements of the S&P 500 index, for example, would have an R-squared of 100, because 100% of its fluctuations are determined by the S&P. A low R-squared number means the fund's movements are independent of the index.

Beta figures are only useful if the R-squared is high, meaning the fund is being compared with an appropriate index.

To obtain data on a Singapore fund's performance and risk, go to:

http://www.fundsingapore.com/index.html

Understanding COST

The first thing you would like to see is the sales charge. You also need to consider expense ratio, which is percentage of a fund's assets are used to cover the costs of managing the fund, including management fees, admin charges, and possibly 12b-1 fees (i.e. marketing and distribution cost).

As a guidelines, here is comparison of average expense ratio:

Additional tips on investing in Mutual Fund:

Knowing how many funds are enough:

According to MorningStar study, Owning just one fund can be a risky bet. After 4 funds, the effect of adding another fund diminishes. Adding a fourth fund helps reduce the overall portfolio's volatility, but not dramatically so. After 7 funds, things have mostly leveled out.

Once you own between 7 to 10 funds, there may be no need for more.

Avoiding overlap

You need to ensure there is no overlap in fund's investment style-box, sector, and individual stocks (i.e. same companies).

In addition:

• Don't buy multiple funds run by the same manager.
• Don't overload on one boutique funds. Boutiques are funds that specialize in a particular style.

Take four corners approach.

The Morningstar style box can be a diversifier's best friend. Owning funds in each corner of the box (large value, large growth, small value, and small growth) can be a straightforward way to ensure that you've build a diversified portfolio.