Read the New York Times, Wall Street Journal, and Other Paid News Sites for Free

At least once in your life I’m sure you’ve gone to read an article linked up from a favorite site only to find a stupid popup asking for a ridiculous amount of money to read the rest of the article. Typically the ad begging for money will block the content or just blur it all out. Pain in the ass. NSFW has a solution you could “hypothetically” use if one were so inclined…

For articles from the WSJ, Forbes, Bloomberg, and most Newspapers

*UPDATE 5/28/19*

Several sites including the WSJ have updated the paywall security. If the Outline method doesn’t work, you will need to use the following updated Github extension link.

Paywall Bypass

*UPDATE 6/20/19*

WSJ will show you the paywall, but if you click X on the ad it will disappear.

 

Go to Outline.com

Copy and paste the URL of the article you want to read into the box and click Create Outline.

outline picture

Every now and then, the Outline program just doesn’t cut it and won’t get past the paywall. Business Insider Prime is a good example,  If by chance, the site is down or you can’t get a result to load. Try this next trick…

Most paywalls are bypassed if you disable JavaScript. For people that aren’t total tech nerds, here are the easiest methods:

PC Users: Open Chrome, click this link and install the Toggle JavaScript plugin. Go to the article you want to read and click the icon in your browser toolbar to disable java.  Reload the page. If you use Mozilla (Firefox), you can just click the reader mode to bypass most walls. If you use internet explorer, you better be a card carrying member of AARP… Use a better browser.

MAC users:  Read the most up to date method at the Apple tutorial page for disabling java in Safari

Voila! You’ve “hypothetically” bypassed the paywall and “hypothetically” saved hundreds of $ in paywall news sources. Just remember to switch Java back on when closing out the article so that the rest of your browsing is unaffected. 

DISCLAIMER: NSFWallstreet.com assumes no liability for the usage of this information.

 

 

**For the more advanced tech guys out there, see below for a chrome extension build to bypass needing to use Outline. You will probably still have cookie popups using this method.

Bypass Paywall 

PEAD: About As Close To A Free Lunch As The Market Will Give You

PEAD is post-earnings announcement drift. It’s a “phenomenon” discovered by in the 1960’s when some guys noticed that after earnings releases the stock nearly always tends to continue drifting in the direction that the earnings tilted. A stock has surprisingly good earnings and jumps on the news, it will probably keep going up for the next few weeks. Same with posting a loss, it will likely continue to drop in price not just the day after earnings, but for the next few weeks.

For example, Kraft Heinz is being slaughtered this morning. As we write, the stock is down 27.5%. Long story short, it because of a trifecta of bad news. Quarterly earnings were massively disappointing, they cut their dividend by 25% (one of the main reasons people buy huge, old companies like this is for the dividend), and they also disclosed that they are being investigated by the SEC for some possible funny business. Whether it’s true or not doesn’t matter. What matters is that the market didn’t like it. So now we have a stock down a massive amount and while this is a VERY overstated example, we can expect with nearly 100% certainty that the stock will continue to fall for a while. It will drift in the direction that it moved initially. Buying right after a huge drop like this is 100% a terrible idea. It may bounce up a bit because of the severity of today’s drop, but that’s only a band-aid on a bullet wound. It’s a pretty damn safe bet to assume you can short the stock or buy puts and probably turn a profit (assuming you don’t overpay for your option).

Conversely, you have a stock like ROKU which posted earnings and revenue higher than Wall Street expected. The stock is up over 20%, a massive over-reaction to an earnings beat. It doesn’t matter though, the street is excited. We can expect Roku to continue in the upward direction for a while. OR at the very least it will likely outperform the broad market.

So that’s all that nerdy acronym means… PEAD = if the earnings announcement was good, the stock will continue moving up for a while. If earnings sucked, it won’t just move down the day after the announcement, it will continue down for the short-term.

 

 

Further reading for the financial nerd types:

Post-Earnings Announcement Effect (Quantpedia)

Surprising Facts on Post-Earnings Announcement Drift (AlphaArchitect)
note: read anything Alpha puts out. Their work is golden.

Drift or Jump: What Drives Post-Earnings Announcement Stock Returns? (SSRN)

Post-earnings-announcement-drift and 52-week high: Evidence from Korea (ScienceDirect)

 

Value Size!! Becoming a Better Investor By Grocery Shopping

There are two ways to value things that come in multiples. By multiples I mean things that contain a number of ounces, liters, gallons, shares of a stock, etc. The first and most common way is to look at absolute price. Perfect example from a recent trip to the grocery store. A 12 oz bottle of a cleanser costs $10.99. A brightly labeled “Value Size!”  bottle has 16 oz and costs 14.99. Well, the value size is… obviously supposed to be a good value. You buy the $14.99 bottle.

You done gone and f*cked up.

The second way to value things is by unit cost. The math here is simple. Divide $10.99 by 12 (ounces). The result means 1 oz costs apx .92 cents. So if the other bottle of 16 oz should obviously cost less than .92 cents per oz. Right? Easy enough. Well, 16 x .92 cents = 14.72. Hold up… that’s .27 cents cheaper than the 14.99 price.

You’ve now 1. bought more of a product and 2. paid a higher price. Pretty sweet deal for the manufacturer and the retailer.

You may say “well, it’s only .27 cents, who gives a sh*t” and that’s fair. But if you start multiplying these price differences up in the hundreds and thousands of dollars it makes a bit more of difference. Especially if you keep making the same stupid mistake.

It’s tiring to hear over and over again that the share price of a stock is too high so it’s too expensive. One share of NVR (a phenomenal homebuilder stock) is $2,639.98. A share of AMD (a semi-conductor stock thats massively popular with gamers) is $24.17. New investors look at the 2 stocks and say that obviously AMD is a hell of a lot cheaper than NVR. Well, AMD is actually over 5x times more expensive…

In this example, we’re going to use the price/earnings (p/e ratio) that we discussed in our last lesson. Remember, Price to Earnings is simply the price you pay for a stock divided by the earnings your share makes in a year. In the last year (TTM or trailing twelve months) NVR has earned $195.31 per share. God d*mn…nice. AMD, the “cheap” stock, has earned .32 cents per share.

NVR’s Price/Earnings (p/e) is then $2639.98 (share price) divided by $195.31 (earnings)
which equals a p/e ratio of 13.26.

AMD’s p/e is $24.17 / .32 cents, which equals 74.61.

What would you rather pay 13.26 or 74.61? It’s not dollars, it’s a relative valuation, but it works the same way. Which leads to the conclusion that…

 

Just because the price is low, does NOT mean that something is cheap. Just because the price is high, does not mean it’s expensive.

 

If you want to get better at valuing things quickly, the grocery store already has a perfect way built in with many products. Most people never look at this, but it’s on nearly every label. Unit cost is written directly on the label. Think of unit cost as the p/e ratio in stocks.

sticker price for blinker fluid
Graphic from All Day Organics

From now on you need to start looking at that unit price label before making your decisions. In the above example, the bulk buy is truly a good deal. The unit price for the 62 oz bottle is less than half the true cost of the 8 oz bottle. In reality though, it can be about a 50/50 chance depending on the store. One thing to note is that if something is on sale you want to look at the adjusted unit price written on the sale label and not the white (typically) regular price label.

Start doing this on a regular basis and you will quickly and completely change how you think about the prices of things. It’s an easy one step closer to becoming a better investor.

 

 

NOTE: Arm & Hammer Baking Soda is made by Church and Dwight (CHD stock symbol). CHD has returned an annualized 18%+ since 1995… May be worth a look when it’s not too expensive. Hint Hint

 

Investing 101: Should Walter White Buy The Local Car Wash Company Or The Laser Tag Company?

Comparative valuation sounds boring, but when you understand the premise you’ll realize it’s easy as hell. The problem you run into when trying to pick stocks is that you’re comparing apples and oranges all to often. Unfortunately, most newbies make 1 of 2 mistakes. The first is looking at the share price of a stock and deciding “well, that stock is way overpriced”. You need to realize that share price is only a small part of the equation. If you don’t know how many shares a company has, then you don’t know how much of the piece of pie you get when you’re buying a share. The other mistake is not having a method of comparing 2 companies like Apple and Walmart. Those 2 companies are NOTHING alike obviously, and without a way to compare them most people usually then revert to which has a cheaper share price. So how do you figure out which one is a better deal. THIS is where we get into comparative valuation.  This one won’t hurt a bit.

Walter White* is laundering his meth money. He needs to find a company in that looks like a legitimate investment. Well, he’s a science teacher so he’s not just going to buy any crappy company out there. People will know he’s not buying a good investment. He’s narrowed it down to either buy Saul’s laser tag company suggestion or the car wash he used to work at. These two companies are nothing alike, so how the hell is he going to figure out which is a better investment. These are the 2 most common ways to compare companies…

Price/Earnings

The laser tag company is $500,000. It earns $75,000 a year. Earnings are sales/revenue for the last year minus all the costs of operating the company. It’s the money the company gets to keep. So the price/earnings ratio for the laser tag company is $500K divided by $75K. We get a P/E of 6.66.

The car wash is $800,000. It earns $160,000 a year.  So it has a P/E of 5 (800K/160K)

So somebody new to investment will typically look at the two and say “obviously, 500K is the better deal”. But now we have a way to compare the two. Laser tag has a P/E of 6.66 vs the cash wash at P/E 5. When buying an investment you typically want to buy the LOWER P/E between two or more investments. In this case, the car wash (while more expensive in dollar terms) is the better deal. It earns more in relation to the price.

 

Price/Sales

The next most common way to value companies is simply price vs sales. The only difference here is that instead of bothering comparing the money the company gets to keep, you just compare who sells more in relation to their price. The car wash is $800,000, but takes in $200,000 in sales every year. It has a price/sales ratio of 4 (800K/200K = P/S 4). Laser tag takes in $130,000 in sales every year. So it’s P/S is 3.85 (500K/130k = 3.85. Obviously, 3.85 is less than 4, so if you were valuing the companies just on sales, the laser tag company would be a better deal in this case.

Why Walter would value based on P/E vs P/S gets a little bit more advanced. If he compares the two based on P/E, the car wash is a better choice. If he compares the two based on P/S, the laser tag company is a better choice. As time goes on, you will figure out which is typically the best way to compare companies. In the beginning, we recommend just looking at Price/Earnings P/E.

A few of you are probably saying “that’s all well and good, but how do you compare companies when you’re buying stocks that have shares”. Simple, a company has a certain number of shares at any given point. So to compare the stocks vs buying a whole company you would just divide price of the overall company (it will be labeled as market cap) by how many shares are available. The good news is the price AND the earnings or sales will be divided by the same number (the number of shares doesn’t change). So NOTHING is different in finding the P/E or P/S with stocks/shares.

The good news is that looking at at the P/E of a company is so common that any stock site that you go to will have it already listed somewhere. Usually on the stocks main page or under a page called “valuation ratios”.  Here’s an example on Yahoo Finance:

 

aapl-2.14.19-pe
Yahoo Finance

By the way the (TTM) means trailing twelve months. Meaning the number is based on the last year worth of earnings.

 

 

So that’s it… you’re done. You can go now…

 

 

 

 

 

*He’s from Breaking Bad. Why are you reading this instead of watching it?

Income Tax vs.Wealth Tax: Taxes Are Boring, But You Don’t Know Sh*t

This one is very simple, but generally the middle and lower income tax brackets don’t understand the difference… And the wealthy love that.

Income Tax: You pay the IRS taxes on how much money you make in the year.

Wealth Tax: You pay the IRS taxes on your NET WORTH* (in addition to your income taxes).

This seems like a small distinction, but the implications are huge. Quick example for you: Joe makes $50k a year and when you add up everything he owns (cash, house, etc) and subtract his debt his net worth is $75k. So his yearly income is 66.6% or 2/3rds of his net worth. Bill makes $8 million dollars a year and his net worth is $50 million dollars. That means his yearly income is only 16% of his net worth. A 50% difference between him and Joe. So when people talk about raising the rates on income tax to say a 70% marginal rate on the rich or wealthy, it sounds like an insanely strong way to obtain revenue for pet projects. But when the wealthy Bill only has to pay that 70% marginal rate on 16% of his wealth, it doesn’t have nearly the effect it would have on somebody like Joe.

 

income tax vs wealth tax
High Marginal Income Taxes

 

Compare that to adding a wealth tax on those that earn more than $10 million a year and the charts change to this:

 

wealth-vs-income-2
Wealth Tax + Income Tax

 

Further reading for different viewpoints on wealth taxation:

Progressives Swoon Over Elizabeth Warren’s Wealth Tax Proposal (HP)

Billionaire investor Howard Marks: America should be worried about the ‘rising tide of anti-capitalism’ (CNBC)

Sen. Warren’s plan to tax the ultrawealthy is a smart idea whose time has come (WP)

Elizabeth Warren Introduces ‘Wealth Tax’ Aimed at America’s Billionaires (BB)

Elizabeth Warren calls for ‘wealth tax’ on richest Americans (FN)

France dangles wealth tax review as ‘yellow vest’ anger persists (BI)

Sen. Warren’s Wealth Tax Is Problematic (TaxFoundation)

Democrat Elizabeth Warren Proposes Wealth Tax on Rich Households (WSJ)

Wealth taxation: An introduction to net worth taxes and how one might work in the United States (WCEG)

The U.S. Needs a Federal Wealth Tax (ITEP)

The Problem With a Wealth Tax (WSJ)

 

 

 

*Net Worth : Assets (Cash, Stocks, Real Estate, etc) – Liabilities (Debt)

“Our Newsletter’s Most Recent Returns: 118%, 546%, 1,537%!!!!” Sneaky, Sneaky…

If you’ve been learning about investing for any amount of time, you’ve probably received some emails or Facebook ads similar to this. It’s an old marketing ploy used by tons of options and stock newsletters* Are those types of returns possible? Yes, but not in the way you think…

Here’s the catch, most often when they talk about returns they are secretly referring to what are called annualized returns. Essentially all that means is that a pick of theirs may do very well over a period of days or weeks. They then estimate how much of a return you would get if they kept that rate of return up for an entire year. On top of this first catch, people tend not to notice that the recommendation “ideally” only uses a small percentage of the money (capital) in their account. They may not want you to spend any more than 2-5% of your money on any one stock, fund, option, etc.

 

Let’s Learn How To Lie With Numbers!!!

get him to the greek

 

So your  newsletter recommends an option to buy and you have $100,000 in an account.
(DO NOT be embarrassed if you have no way near this. This is just a round number)

The newsletter recommends an option to buy. It also recommends you not use more than 1% of your capital for this one trade.

That means you should spend more than 1% of your account on any one option recommendation. To make this easy, you spend all $1,000.

The option does very well and in 2 weeks has gone up 56%. Totally reasonable expectation with a decent options play. Now to lock in that options trade they recommend closing out the trade. So you’ve made 56% in 14 days. Super.

Here’s where the sneaky part comes in. 2 weeks is 14 days (obviously) and in finance we never use 365 days to estimate a year, we use 360.

So in 14 days we’re up 56%. As a decimal that is .56 (56% divided by 100 to get the decimal).

So how much of a return is that per day? We divide .56 by 14 = .04. The option made 4% per day. Not bad at all.

Now if we want to find out the annualized return we multiply the daily return rate by 360 (one financial year) So .04 x 360 = 14.4. Now multiply it by 100 to get that number as a percentage and we get 1,440%!!!!!  

They just made you 1,440% (annualized) on just ONE recommendation!!!

Oh wait, we forgot that was only on $1,000… and really you only made 56% on that option.  That’s $560…

Now $560 is nothing to sneeze at, obviously. But remember you have $100,000 in your account. $560 is .56% which the stock market may go up or down in a single day…

That newsletter made you .56% on your account, not 1,440%. Bit less impressive, huh?

 

This is how investment marketing works. They’re not REALLY lying, but they kinda are. They’re lying with numbers people don’t understand, not with words people DO understand. You just have to know how the math works and know where to find the disclosures. Next time you see an ad promising returns like this, ask yourself what is more realistic .56% or 1,440%. Good rule of thumb: if the primary marketing tool of an investment is the promise of a specific rate of return, run for the hills. Beware of wolves in newsletter’s clothing.

 

 

 

 

 

*For those who don’t know, investment newsletters offer you stock/funds/option picks to buy or sell with every issue (generally monthly) There ARE some fantastic newsletters out there, but they are few and far between. Prices range from about $40 up to $5,000+ for any one newsletter. Combo deals of multiple newsletters can reach over $25,000+.

Get Out of Debt the Fastest Way Possible (Without Scammy Bullsh*t)

There have literally been entire books fluffed up just to teach what we’re about to show you. It’s the fastest and most effective way we’ve come across to eliminate debt when feasible (other than having it negotiated and wiped off). It genuinely can be a life changer, but most people have never heard of or considered it, regardless of how easy it is. This is also one of the only useful things Dave Ramsey or Suze Orman have ever taught their unfortunate followers*.

 

Part 1: Minimum Payments

Let’s start with somebody who has a fairly average amount of debt. Jim. The guy’s got 2 credit cards and worthless, yet crippling student debt.

1. Visa card has a $1,000 balance. Interest rate is 16%. Minimum payment is $25 a month.
2. Amazon card has a $4,700 balance. Interest rate is 25%. Min.payment is $150 a month.
3. Student debt balance is $37,000. Interest rate is 6%. Min. payment is $415 a month.

Ok, right off the bat. Notice that he’s paying $590 just to meet his minimum payments. His Amazon card’s interest is insane, but not unusual at all. It’s hard not to feel like you’re running on a financial treadmill when these are the kinds of debts you’re up against. Some ambitious, but misled people will sometimes add additional chunks of cash here and there to pay off the debts sooner when they get a tax return or something similar. They’ll spread out the extra payments to each one of the credit cards and wonder why they don’t seem to get ahead. There is no real system in place.

So if Jim decides to stay with this no system route and continues just making the minimum payments on each debt:

1. The Visa is paid off in 5 years. $480.59 paid in interest.
2. The Amazon card is paid off in 5 years, 2 months. $2,972.45 paid in interest.
3. His student debt will take almost 10 years (119 months). $11,906.68 paid in interest.

So it takes Jim just shy of 10 years to pay everything off (assuming he is able to keep his income at the same level) and he will have paid the credit card companies a total of $15,360  in interest. Depressing. As. Hell. But you already knew that…

 

Part 2: Rolling Payments

Here is where the trick begins…

Jim is going to make ONE small change. Whenever the first loan is paid off (the smallest debt balance), Jim will take the payment from the debt he just paid off and use it as an ADDITIONAL payment on the next biggest debt balance. So he pays off the Visa, then takes that $25 he was already paying and adds it to his Amazon payment for a total of $175 a month ($25 Visa + $150 Amazon). Remember, Jim isn’t having to work any harder to make ends meet. He was already paying this amount every month. The Amazon card gets paid off as well. He then takes the total Amazon payment of $175 and adds it to the $415 payment for student debt for a total of $590 a month. To recap, the only difference between the first example and this example is that Jim is rolling his debt payment over to add to the next debt payment instead of just using the money on other things. Let’s see if that changes any thing at all…

Open this link in another tab to follow along.

Put all of Jim’s debt into the calculator as seen below:

snowball step 1

 

Click Go, scroll down and notice a few things:

snowball step 2

The first thing you probably saw is the “saves you $0.00” and then another 0. At which point you probably thought “f*ck NSFW”. Understandable. Skip the words avalanche and snowball and check out the column that says Interest Paid.  See how Interest Paid says $14,137 in both rows. Remember what what Jim ended up paying total before with minimum payments? $15,360.

Now look the column that says Payoff. 97 months. How long did it take before? 119 months. 

Jim did not contribute ANY more than he was already going to pay and saved $1,223 and paid off the loan 21 months earlier. All from rolling one debt payment to the next.

 

Part 3: The Snowball or the Avalanche

Now, we’re going to see why you saw those sad ass $0.00’s in the calculator. When people talk about money makeovers or debt reduction plans, they’re obviously going to include something about budgeting to put a little bit of an extra payment towards your debt. You pay some amount on top of your minimum payments. Don’t get overwhelmed at the thought. You don’t have to pay much, it’s the strategy that makes this work.

Where you put that little extra bit you budgeted determines whether you’re going to be doing a debt snowball or a debt avalanche. In our example, Jim’s extra payment will be $50 a month (not because that should be your goal, but just because it’s a round number)

With a debt snowball (the system Dave Ramsey seems to think he invented) You order your debts from smallest balance to largest, and pay them off in that order, rolling each payment to the next. Jim’s order would go Visa ($1,000) Amazon ($4,700) Student Loans ($37,000) The additional $50 payment amount he makes will go to the smallest balance debt only, while he continues to make minimum payments on the other loans. He doesn’t split it 3 ways and pay extra on all 3 loans at once. So Jim pays an extra $50 on the Visa (the smallest balance. Making his monthly payment $75, because $50 + $25), and pays the minimum amounts on Amazon and the Student loans. When the Visa is paid off, the $75 adds to the $150 for the Amazon payment, and so on.

With a debt avalanche (Suze Orman’s preferred system) You order your debts from highest interest rate to lowest, and pay them off in that order, rolling each payment to the next. Jim would pay Amazon (26%) Visa (16%) then student debt (6%). Once again, the extra $50 will only be added to the first highest interest balance, not all 3 at once.

So to plug this into the calculator we’re using; all you need to do change the total monthly amount in Step 2 from $590 (all the min. payments added together) to $640 (min. payments + 50)

snowball step 3

 

The results will look like this:

snowball step 4

Now your reaction is probably “Jim only saved $248 f*ckn dollars!?” And the answer is “no, he saved way more”. He saves $248.54 more in interest payments by choosing the avalanche method over the snowball method in this case. But he will pay off his first debt (Visa) 18 months sooner by going with the snowball method (smallest balance first) instead of the avalanche (highest interest rate first)

Big picture, where did that $50 extra payment get Jim?

Ok, in the Payoff column it shows 86 months and 85 months and that the avalanche method allows him to pay everything off in 85 months. In the interest rate column, the avalanche method also pays less in interest, totaling $11,672.

This tells us that the avalanche method, pays everything off faster and saves more interest than the snowball method here. The only reason Jim might choose the snowball method is because he would pay off the first debt a year and a half quicker. He could go that route and be feel better eliminating one of his debts sooner, but would still end up paying more in interest and taking a month longer to pay everything off in the end.

 

So let’s go back to the numbers from part one for comparison.

Originally, Jim paid $15,360 over 119 months by making minimum payments.

By contributing an extra $50 a month and rolling his payments over depending on the next highest interest rate; Jim paid $11,672 over 85 months. (Debt Avalanche)

He’s debt free almost 3 years sooner and saved $3,688 in interest payments.

 

Part 4: That’s It…You’re done…

We didn’t pick the numbers for Jim’s situation out of a hat. His numbers are based on  national averages for debts in 2018 and from people we’ve recently spoken to us about their debt issues.The “that’s just his one-off weird situation, that won’t work for me” argument isn’t going to fly here. You may see his numbers and say “well, it’s still going to take 7 years to pay everything off, why bother?” Unfortunately, that’s a common mindset. What typically happens is that several years down the road when the debt still looks the same people say “man, wish I started doing that a few years back.” Regardless, gather all your personal debt information and plug it into the calculator. Compare how much faster you can pay everything off by rolling payments and budgeting for extra payments. Review the numbers to see if you should go after the smallest balance first or attack the highest interest rate. Sometimes there is a much more clear picture on which to choose. The snowball method may pay everything off 2 years faster than the avalanche, for instance.

Another thing that may not have occurred to you… after all Jim’s debts are paid off he has an extra $590 that he didn’t have available before. That’s essentially a $7,080 raise he didn’t have to ask for. Think about how you could apply all the money you spend on debt payments for things you want without having to add more debt. If you’ve been wanting to go on a vacation, it doesn’t seem so hard to get the funds together when you were “already saving it”. You were just saving and giving it for the debt holders. If you’re planning for retirement, you might be able to max out a retirement account without even having to budget further. There is literally no downside to this method so you have nothing to lose by giving it a shot. And if you DO decide you don’t even want to bother, at least you didn’t have to wade through 300 pages of money guru garbage after paying $29.99+ just to make that decision.

 

Note: Unbury.us is an alternative calculator that some prefer for avalanche and snowball comparisons

 

 

*NEVER listen to their investment advice. Their personal finance and budgeting tips are typically fairly sound, but their investment advice is often completely misguided or just plain false. Perfect example is Dave Ramsey’s claim of the average mutual fund returning 12% a year. Horsesh*t. Tread with extreme caution with any of the following  popular “money gurus”: Dave Ramsey, Suze Orman, Tony Robins, David Bach, Robert Kiyosaki. In future articles we will debunk claims from each one of them.