Time to Refocus on the Balance Sheet
Over the past couple of years, as stock prices have continued to climb higher, investors tend to pay more attention to the income statement. To be sure, earnings growth drives investment returns, but my concern is that investors are focusing too much on the income statement, and the balance sheet is acting as a sidekick. Given today's stretched equity valuations, investors should refocus more attention on the balance sheet.
A strong, healthy balance sheet is the defensive line of a business. And as my favorite football coach, Nick Saban of Alabama (I'm a Georgia Bulldogs fan at the core, but I think Saban is a gridiron genius), demonstrates time and time again, most recently last week against LSU, defense can often be the best form of offensive. A strong defense will protect you during the times when your offense is not at its best. ...391 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.
