Joseph Phelon

How Inflation Affects Investments

For the past few years, the US government has increased its deficit spending by more than a trillion dollars a year. This amount of spending is unprecedented. For the current year, our elected officials are talking about a budget which includes approxim... Read >

How to Mitigate Inflation Risk with Stores of Value

Throughout various times in history, national currencies were backed by precious metals. Most recently, the gold standard was re-established after World War II when a system of fixed exchange rates was instituted. In 1971, the US government officially s... Read >

Four Elements to Effective Marketing

Professional marketers apply the four elements of value to marketing campaigns. Once you recognize these four elements, you’ll be on your way to successfully marketing your own products and services. The first element is utility. What’s utility? I... Read >

How to Minimize the Impact of Losing a Key Employee

Jerry Sloan recently resigned as head coach of the Utah Jazz. His resignation was a surprise. He was with the Jazz organization for 26 years and was the longest tenured coach in all of America’s professional sports. What does Sloan’s resignation mean t... Read >

Investing in Privately Held Companies - Finding the Diamonds in the Rough

One factor you should consider when assessing the investment risk in a privately owned business is called liquidity risk. Liquidity ratios measure how easily a company can convert assets to cash quickly. An analysis of the company's historical ratios as... Read >

Profits - Comparing Apples to Apples

One key element you should consider when you are evaluating two or more businesses is the profit margin ratio. An investigation of the company's historical ratios and an analysis of the company's ratios against industry standards should be performed. ... Read >

Misconceptions about Book Value

A few years ago, I was in a meeting with an attorney from a law firm with a good reputation. Part of our meeting had to do with calculating a private company's stock value. The lawyer wanted to use the book value of the company's equity. This is the am... Read >

Improving Cash Flows in a Recession

The cash flows in your company look like three faucets pouring water into a bathtub. Your success is determined by your ability to keep water in the tub, or said another way, keep cash in the company. The first faucet has cash from operating activity ... Read >

Forecasting 101

Forecasting is a vital part of any investment. Buyers do not purchase historical results. They buy what they perceive the company is expected to generate in the future. Although this expectation is often influenced by past results, future prospects are... Read >

Managing Business Risk

Understanding the nature of your company is an essential part of obtaining an accurate value. IRS revenue ruling 59-60 emphasizes the importance of understand the company's nature This revenue ruling goes into more detail by stating, "The history of a ... Read >

Appraising Your Company

Sometimes I see people take an average of a few calculations and consider it a good way to come up with the value of their business or professional practice. It surprises me how quickly an owner will accept this method when he or she needs to know the co... Read >