Why ITT Educational Services Shares Fell

Is this meaningful? Or just another movement?

Jan 30, 2014 at 8:35PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our thesis.

What: Shares of ITT Educational Services (NYSE:ESI) were flunking out today, falling as much as 23%, and finishing down 21% after an underwhelming fourth-quarter earnings report.

So what: The for-profit educator has been particularly volatile during the past year, and that pattern continued as revenue fell 12.6%, to $262.9 million, though that actually beat estimates of $260.9 million. Meanwhile, the company saw its per-share loss grow from -$0.41 to -$0.49, as overall enrollment dropped 5.8%, to 57,542. As a silver lining, new student enrollment ticked up 4.5%, to 13,995, but continuing students fell 8.6%, a sign that dropouts are increasing, and that students are perhaps not finding the school worth their investment.

Now what: The for-profit education industry tends to track as a whole, and the group of stocks has begun to battle back recently after two years of sharp declines. The fourth quarter is generally a weak one for ITT, so the loss should not be so surprising. In its earnings call, management forecast EPS for 2014 of $3.00-$3.65 compared to the analyst average at just $3.11. That range would be better than its 2013 total of $2.52, meaning now could be a good time to invest. Still, I'd like to see student enrollment and revenue numbers moving in the right direction first.

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A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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