So, you have qualified as an accountant and have followed the rules for a successful start in your career – you haven’t switched employers too many times while in your 20s, you’ve gained good experience and identified the area you want to work in. Now you’re in your 30s – what next?
Your 30s are when the grown-up years start. You should have worked out what you want to do and where you are aiming for – this is the time to really transform your ambitions into reality. But that will take focus, and hard work.
‘Your 30s are the most fertile and productive years of your career,’ is how Max Williamson, director of the audit careers website CareersinAudit.com, puts it. ‘Things really start to happen. You should have all the skills you need by now, so it’s a question of consolidating that and pushing yourself forward quite aggressively. People can make quantum leaps in terms of career advancement and pay, and I would really expect to see the high flyers start to pull away from everyone else.’
Too Late
Williamson pulls no punches – if you don’t get your career sorted by the time you are 40, it’s probably never going to happen. ‘That’s an unspoken understanding in the profession,’ he says. ‘There’s no pointing keeping your powder dry at this stage for use in the future because there’s nothing else to keep it dry for.’
That does not necessarily mean just aiming for the best job you can, though – it’s about positioning yourself where you want to be. ‘Your 20s were about getting as much experience in different areas as possible, but now it’s about narrowing that experience down and focusing on what you really want to do and where you want to be,’ says Alan Stewart of Heidrick & Struggles.
So what does this mean in cold, hard career terms? The 20s are all about getting qualified and expanding your options,’ says Williamson. ‘In your 30s it’s about being a manager. You need to step up and manage people rather than just contribute to what they do. You really need to have pulled away by your late 30s and you should be in a senior managerial position, otherwise what you will end up with is a career rotation rather than career lift.’ In other words, any move you make will be more sideways rather than up.
For an accountant working in industry, ‘making it happen’ means being in charge of a department – perhaps as a regional or divisional finance director or, if you are really one of the high flyers, a CFO position, in time for your 40th birthday.
Stewart adds, though, managing is not for everyone. ‘We see plenty of people who feel they are not suited to managing people,’ he says. ‘The alternative is moving into a consultative role, or perhaps a chief accountant role or more of a technical specialist in their 30s.’
No one should make the mistake though, of thinking that their career progression will be automatic as their superiors miraculously notice how good they are. ‘There are the gifted few to whom great things happen, but that’s the exception rather than the rule,’ says Williams.
He recommends ‘mapping’ out your CV, making sure that the size and complexity of the teams you are managing increases steadily throughout your 30s so by the end of the decade you should be the top choice for the number one spot in the finance team (or in your chosen department if you are in practice).
For some people, though, the route to the top may not be smooth, perhaps because management levels in their organisation are overloaded. If that is the case, says Williamson, your only option may be to leave. ‘If you do find that you are being blocked in your current company, for whatever reason, you need to have the courage to step up. If you don’t, time will pass and the opportunity may be gone.’
Family Ties
A seamless rise to the top is, inevitably, more of a tricky prospect for a woman who also wants to have a family. Williamson acknowledges that your 30s are difficult for an accountant of either gender who is likely to be juggling career progression with a young family, but women are paced at a fundamental disadvantage. When asked what the advice would be for a female accountant who was aiming for a top job but also wanted to take a career break to have a family, Williamson said: ‘In a word, don’t.’
While more employees are offering flexible working and the situation for ambitious working mothers has improved drastically over the years, it is ridiculous to pretend that taking a career break for motherhood will not, at the very least, slow your career prospects. The best advice is to choose your employer carefully – the Big 4 accountancy firms, for instance, are among the most progressive employers in terms of flexible working and are making genuine attempts to make things easier for working mothers. It is also important to choose your immediate line manager carefully, as they will be the ones making the decision about what you will do when you return to work.
‘My advice would be to treat maternity leave as you would any career break – think about what you have learned about yourself and what you want to be different when you return to work,’ says Stewart. ‘A lot depends on your attitude to why you are going back to work – it makes a world of difference if you convey your enthusiasm for the job.’
A question often considered by accountants in their 30s is whether am MBA would help their future career prospects. Williamson argues that it would not. ‘I think that the ACA qualification holds firm as an excellent business qualification and if you have experience as well to back it up, I don’t see why you would need an MBA. Good people are generally moving too quickly to allow themselves time out to take an MBA anyway.’ He adds, though, that if you have plans to move into a more general business role, an MBA can be a useful way of repositioning yourself. Stewart agrees, saying that an MBA is generally a better bet if you are considering a career change.
If you still haven’t quite worked out shat you want to be doing with your career, don’t be afraid to take advice from the experts. Williamson points out that a good recruitment consultant will be more willing to advise you on a career plan, even if you’re not looking immediately for a new job.
Above all, try to think about what you want to be doing, rather than what you should be doing. ‘A good job is about what makes you go the extra mile,’ says Stewart. ‘You tend to be better at the things you are interested in – and if you are good at your job, money comes along anyway. If you are approaching your 30s now, I’d say think about your current job and the parts you like about it, and then try and replicate that in the future.’
- Liz Fisher for Accountancy Magazine.
Monday, March 19, 2012
Tips for Auditors in their 20s
You are in your 20s and newly qualified as a graduate junior auditor. Congratulations! But now what? Where do you want to be in 30 years time? And how are you going to make that happen? (If you are reading this rather than Nuts or Heat, that’s a very good start).
The frightening truth is that the decisions you make in the first few years after qualification will shape the rest of your career. ‘Although your career has a long way to go when you are in your 20s, a good start means you don’t have to spend your 30s unraveling what could be some costly mistakes,’ says Max Williamson, chief executive of the recruitment website CareersinAudit.com ‘Those graduates who make the right choices in their 20s can really give their career a flying start and crucially, begin to create some space between themselves and the competition.’
First time is the best
The first step in a glittering career as an auditor, obviously, is gaining your degree. That does not mean scraping through the exams – the competition in the profession is such that attitude, commitment, enthusiasm and above all, and the quality of passes (i.e. first time) really matter. Remember that your qualification is the absolute bedrock of your career, whichever path you intend to take later.
Alan Stewart of the executive search agency Heidrick & Struggles adds that the first move after qualification will be, for many, the first meaningful decision they will have made. It is also the most confusing. ‘The choice a newly qualified is faced with can be overwhelming,’ says Stewart, ‘but I tell people not to panic at this stage about messing up their career.’
Stewart asks newly qualified candidates to sit down and think carefully about what part of their job they like, and what they get excited about. For some, though, the answer is that they like nothing about being an accountant. ‘A lot of graduates train as accountants simply because it seems like a good option at the time,’ says Stewart. ‘But some newly qualifieds think that they have to spend the rest of their lives justifying the time and effort they have spent getting it. Your accountancy qualification will be a good qualification, whatever you do from now on.’
The basic decision for newly qualifieds is a simple two-way choice: practice or industry? Whichever is your preference, the decision needs to be a thorough one. ‘If you make the decision to leave practice, then it needs to be carefully thought-out’ says Williamson. CareersinAudit.com believes that newly-qualified accountants should ideally remain with their employer post-qualification for between three to five years, unless there are exceptional circumstances. But, adds Williamson, staying in practice should not be considered an easy option – if you stay, it needs to be for the right reasons and apathy certainly isn’t one of them.
For newly qualifieds hoping for a career in business – and perhaps aiming for a CFO or CEO role – there is a mind-boggling array of choice. But while the traditional route to FD level invariably involved a stint as a financial controller, the nature of the FD role has changed in recent years. Alan Stewart believes that financial planning and analysis is a more useful route as it hones the forward-looking skills now expected of finance directors.
Generally, the traditional climb up the career ladder has disappeared, and that means that your options in your 20s are much wider. ‘I’ve realised over the years that there is no one route to success,’ says Stewart. ‘People have much more mosaic careers these days. The accountancy profession is a very structured environment, particularly in terms of the career structure in the first five years after qualification. But I would urge young accountants to get rid of that mentality – it’s about how good you are. Accountancy is a much more entrepreneurial career these days, if you want it to be.’
That said, if you are thinking of a long-term career in business, internal audit is still an excellent way of gaining all-round experience, even if it may not seem the most exciting option. ‘You have to take penance if you want to move forward’, says Stewart. ‘The point is that when you move up in an organisation people want to work for someone who has done the job that they were doing.’
Moving too soon
White it is important to gain experience in new roles, many young accountants fall into the trap of accepting the first well-paid job that comes along, only to regret it and move on too soon. The good news is that everyone is allowed to make mistakes, provided they learn from them. ‘You can make a bad decision the first time and it will have no impact on your career,’ says Stewart. ‘The second job you take after qualifying is the important one, because employers expect that to a more meaningful move. If your second job doesn’t last more than a year, you’re in trouble.’
Williamson agrees: ‘Moving jobs on a regular basis does not reflect well on an accountant and as you move into your 30s, there certainly shouldn’t be any more than three companies on your CV.’
With so many qualified accountants on the recruitment market, employers are increasingly looking for skills and experience that set candidates apart. International secondments can add significant value to your career prospects, but again they need to be carefully chosen. One of the major benefits of being in your 20s is that you have few ties ad commitments and so should be a prime candidate for an overseas secondment, but young accountants should also be wary of what recruiters call the ‘knee-jerk effect’.
Williamson warns that anyone offered an overseas role should think carefully about whether the job will mean more to them than year-round sunshine. The novelty of working abroad will soon wear off and important considerations such as the cost of living in a different country are often overlooked. Future employers, he adds, can often presume that an overseas secondment in, say, a Caribbean country can mean that you had it easy, even if you worked your socks (or sandals) off.
Overall, successful career planning involves just a little careful thought and a small dose of realism. ‘When you are in your 20s you may not have to do a job for a while that you are not enamoured with, but which you know will be good experience,’ warns Stewart.
For Williamson, the ideal early career can be summed up in a few words: ‘The perfect candidate enters their 30s with a qualification, a second language, proven international experience and an excellent track record of promotion with a small number of companies.’ Good luck!
-Liz Fisher for Accountancy Magazine.
The frightening truth is that the decisions you make in the first few years after qualification will shape the rest of your career. ‘Although your career has a long way to go when you are in your 20s, a good start means you don’t have to spend your 30s unraveling what could be some costly mistakes,’ says Max Williamson, chief executive of the recruitment website CareersinAudit.com ‘Those graduates who make the right choices in their 20s can really give their career a flying start and crucially, begin to create some space between themselves and the competition.’
First time is the best
The first step in a glittering career as an auditor, obviously, is gaining your degree. That does not mean scraping through the exams – the competition in the profession is such that attitude, commitment, enthusiasm and above all, and the quality of passes (i.e. first time) really matter. Remember that your qualification is the absolute bedrock of your career, whichever path you intend to take later.
Alan Stewart of the executive search agency Heidrick & Struggles adds that the first move after qualification will be, for many, the first meaningful decision they will have made. It is also the most confusing. ‘The choice a newly qualified is faced with can be overwhelming,’ says Stewart, ‘but I tell people not to panic at this stage about messing up their career.’
Stewart asks newly qualified candidates to sit down and think carefully about what part of their job they like, and what they get excited about. For some, though, the answer is that they like nothing about being an accountant. ‘A lot of graduates train as accountants simply because it seems like a good option at the time,’ says Stewart. ‘But some newly qualifieds think that they have to spend the rest of their lives justifying the time and effort they have spent getting it. Your accountancy qualification will be a good qualification, whatever you do from now on.’
The basic decision for newly qualifieds is a simple two-way choice: practice or industry? Whichever is your preference, the decision needs to be a thorough one. ‘If you make the decision to leave practice, then it needs to be carefully thought-out’ says Williamson. CareersinAudit.com believes that newly-qualified accountants should ideally remain with their employer post-qualification for between three to five years, unless there are exceptional circumstances. But, adds Williamson, staying in practice should not be considered an easy option – if you stay, it needs to be for the right reasons and apathy certainly isn’t one of them.
For newly qualifieds hoping for a career in business – and perhaps aiming for a CFO or CEO role – there is a mind-boggling array of choice. But while the traditional route to FD level invariably involved a stint as a financial controller, the nature of the FD role has changed in recent years. Alan Stewart believes that financial planning and analysis is a more useful route as it hones the forward-looking skills now expected of finance directors.
Generally, the traditional climb up the career ladder has disappeared, and that means that your options in your 20s are much wider. ‘I’ve realised over the years that there is no one route to success,’ says Stewart. ‘People have much more mosaic careers these days. The accountancy profession is a very structured environment, particularly in terms of the career structure in the first five years after qualification. But I would urge young accountants to get rid of that mentality – it’s about how good you are. Accountancy is a much more entrepreneurial career these days, if you want it to be.’
That said, if you are thinking of a long-term career in business, internal audit is still an excellent way of gaining all-round experience, even if it may not seem the most exciting option. ‘You have to take penance if you want to move forward’, says Stewart. ‘The point is that when you move up in an organisation people want to work for someone who has done the job that they were doing.’
Moving too soon
White it is important to gain experience in new roles, many young accountants fall into the trap of accepting the first well-paid job that comes along, only to regret it and move on too soon. The good news is that everyone is allowed to make mistakes, provided they learn from them. ‘You can make a bad decision the first time and it will have no impact on your career,’ says Stewart. ‘The second job you take after qualifying is the important one, because employers expect that to a more meaningful move. If your second job doesn’t last more than a year, you’re in trouble.’
Williamson agrees: ‘Moving jobs on a regular basis does not reflect well on an accountant and as you move into your 30s, there certainly shouldn’t be any more than three companies on your CV.’
With so many qualified accountants on the recruitment market, employers are increasingly looking for skills and experience that set candidates apart. International secondments can add significant value to your career prospects, but again they need to be carefully chosen. One of the major benefits of being in your 20s is that you have few ties ad commitments and so should be a prime candidate for an overseas secondment, but young accountants should also be wary of what recruiters call the ‘knee-jerk effect’.
Williamson warns that anyone offered an overseas role should think carefully about whether the job will mean more to them than year-round sunshine. The novelty of working abroad will soon wear off and important considerations such as the cost of living in a different country are often overlooked. Future employers, he adds, can often presume that an overseas secondment in, say, a Caribbean country can mean that you had it easy, even if you worked your socks (or sandals) off.
Overall, successful career planning involves just a little careful thought and a small dose of realism. ‘When you are in your 20s you may not have to do a job for a while that you are not enamoured with, but which you know will be good experience,’ warns Stewart.
For Williamson, the ideal early career can be summed up in a few words: ‘The perfect candidate enters their 30s with a qualification, a second language, proven international experience and an excellent track record of promotion with a small number of companies.’ Good luck!
-Liz Fisher for Accountancy Magazine.
Why Love Is a Neurochemical Roller Coaster
"Love makes your happy chemicals surge, but they always dip."
Love triggers dopamine, serotonin, and oxytocin. That's why it's so motivating. But happy chemicals come in spurts. They do their job by turning off after they turn on. When your happy chemicals dip, you might interpret it as a loss of love. That turns a natural fluctuation into a crisis. You are better off knowing why love makes happy chemicals go up and down.
Love triggers dopamine
Dopamine is the great feeling you get when you find your missing keys. It's the neurochemical that evolved for seeking and finding. Animals sniff around for food and mating opportunities, and when they find something that meets their needs, dopamine surges. But the surge is short. Dopamine does its job by dropping after it rises, so it's ready to alert you to the next chance to meet your needs.
When you find your keys, you don't expect that great dopamine feeling to last. But when you find "the one," you make so much dopamine that you assume you will soar forever. When the dopamine finally subsides, you wonder what's wrong. You might even blame "the one" for having changed.
I am not saying we should keep seeking new mates to stimulate dopamine. I'm saying we did not evolve to be on a dopamine high all the time.
Love triggers oxytocin
Oxytocin is the neurochemical that causes trust. It's released during orgasm, and in smaller amounts when you hold hands and when animals lick their babies. Oxytocin is the good feeling of a common cause, from a political rally to a football huddle to honor among thieves.
Reptiles release oxytocin during sex, but mammals produce it all the time. That's why reptiles stay away from other reptiles except when mating, while mammals form attachments to relatives and herds. The more oxytocin you release with a person, the more attached you feel. More touch, more oxytocin, more trust. But trust gets complicated in the human brain. You trust a person to live up to your expectations, and don't realize how complex your expectations are. Eventually, your loved one fails to meet your expectations, and you fail to meet theirs.
To your mammal brain, any loss of trust is a life-threatening emergency. When a sheep is separated from its flock, its oxytocin dips and its cortisol surges. Cortisol is the feeling we experience as fear, panic, or anxiety. It works for sheep, motivating them to re-connect with the flock before they're eaten alive. In humans, cortisol turns disappointed expectations into emergencies.
Love triggers serotonin.
Getting respect feels good because it stimulates serotonin. In the animal world, social dominance brings more mating opportunity and more surviving offspring. Animals don't dominate because of conscious long-term goals. They dominate because serotonin feels good.
Your love is pure and untainted by social status, of course. But in other people, you can easily see that status magnifies the neurochemical power of love. In yourself, you have to admit that the romantic attentions of a higher-status person trigger strong feelings. And if you fall for someone who just happens to raise your status, you can't deny that it feels good.
But your brain always wants more respect to get more serotonin. Your loved one may give you that feeling at first, by respecting you or helping you feel respected by others. But your brain takes the respect you already have for granted. It wants more respect to get more good feelings. That's why some people constantly make more demands on their loved ones, and others constantly seek out higher status partners. We'd be better off if we understood the origins of our neurochemical impulses.
Mammalian signals
Animals are surprisingly picky about who they mate with. Free love is not the way of nature. Sex has a preliminary qualifying event in every species. Animals only have sex when the female is actively fertile (except bonobos). Female chimpanzees only have sex every five years. The rest of the time they're pregnant or nursing, and without ovulation the males aren't interested. When opportunity knocks, it's a big deal. Brains good at navigating such hurdles got passed on, and natural selection produced a brain bent on doing whatever it takes to reproduce itself.
Happy chemicals evolved because they get us to do things that promote reproduction. That doesn't make sense in our world of birth control and sustainability pressures. But in the state of nature, lots of babies died, and you had to really focus on making babies to have a few that survived. You may not care about making babies, but your brain is inherited from those who did. Natural selection created a brain that rewards reproductive behavior with happy chemicals.
Love promotes reproduction, so it triggers a lot of happy chemicals. Sex is just one aspect of reproductive behavior. It's important—love motivates you to move mountains in order to be alone with that special someone. But the survivability of your offspring is what mattered to evolution. And that depends on building bonds of attachment, and competing for top quality mates. Of course, your love is above such biological banalities. But happy chemicals feel so good that your brain looks for ways to get more. Neurochemicals do their job without words, and we look for words to explain the crazy motivations they create in us.
Happy chemicals give us information that's hard to interpret. For example, if I watch a football game and burst with excitement when my team scores, I see thousands of others share my reaction. It feels like they understand me. Why doesn't my partner understand me when thousands of others do? The answer is simple. Spectator sports trigger oxytocin, as do politics, religion, and other group activities. You get a good feeling of trust. Of course, trusting a large number of people in a limited way is not the same as trusting one person in a comprehensive way. But to your mammal brain, it's all the same oxytocin.
We want all the happy chemicals we can get. You expect some from romance, and some from other aspects of life. But no matter where you get them, happy chemicals sag after they spurt. When you know why, you can manage your behavior despite the confusing neurochemical signals.
There's good news here. Don't blame yourself or your partner if you're not high on a happy chemicals all the time. Maybe nothing is wrong. You are just living with the operating system that has kept mammals alive for millions of years.
- Loretta Graziano Breuning, Ph.D. in Your Neurochemical Self
Love triggers dopamine, serotonin, and oxytocin. That's why it's so motivating. But happy chemicals come in spurts. They do their job by turning off after they turn on. When your happy chemicals dip, you might interpret it as a loss of love. That turns a natural fluctuation into a crisis. You are better off knowing why love makes happy chemicals go up and down.
Love triggers dopamine
Dopamine is the great feeling you get when you find your missing keys. It's the neurochemical that evolved for seeking and finding. Animals sniff around for food and mating opportunities, and when they find something that meets their needs, dopamine surges. But the surge is short. Dopamine does its job by dropping after it rises, so it's ready to alert you to the next chance to meet your needs.
When you find your keys, you don't expect that great dopamine feeling to last. But when you find "the one," you make so much dopamine that you assume you will soar forever. When the dopamine finally subsides, you wonder what's wrong. You might even blame "the one" for having changed.
I am not saying we should keep seeking new mates to stimulate dopamine. I'm saying we did not evolve to be on a dopamine high all the time.
Love triggers oxytocin
Oxytocin is the neurochemical that causes trust. It's released during orgasm, and in smaller amounts when you hold hands and when animals lick their babies. Oxytocin is the good feeling of a common cause, from a political rally to a football huddle to honor among thieves.
Reptiles release oxytocin during sex, but mammals produce it all the time. That's why reptiles stay away from other reptiles except when mating, while mammals form attachments to relatives and herds. The more oxytocin you release with a person, the more attached you feel. More touch, more oxytocin, more trust. But trust gets complicated in the human brain. You trust a person to live up to your expectations, and don't realize how complex your expectations are. Eventually, your loved one fails to meet your expectations, and you fail to meet theirs.
To your mammal brain, any loss of trust is a life-threatening emergency. When a sheep is separated from its flock, its oxytocin dips and its cortisol surges. Cortisol is the feeling we experience as fear, panic, or anxiety. It works for sheep, motivating them to re-connect with the flock before they're eaten alive. In humans, cortisol turns disappointed expectations into emergencies.
Love triggers serotonin.
Getting respect feels good because it stimulates serotonin. In the animal world, social dominance brings more mating opportunity and more surviving offspring. Animals don't dominate because of conscious long-term goals. They dominate because serotonin feels good.
Your love is pure and untainted by social status, of course. But in other people, you can easily see that status magnifies the neurochemical power of love. In yourself, you have to admit that the romantic attentions of a higher-status person trigger strong feelings. And if you fall for someone who just happens to raise your status, you can't deny that it feels good.
But your brain always wants more respect to get more serotonin. Your loved one may give you that feeling at first, by respecting you or helping you feel respected by others. But your brain takes the respect you already have for granted. It wants more respect to get more good feelings. That's why some people constantly make more demands on their loved ones, and others constantly seek out higher status partners. We'd be better off if we understood the origins of our neurochemical impulses.
Mammalian signals
Animals are surprisingly picky about who they mate with. Free love is not the way of nature. Sex has a preliminary qualifying event in every species. Animals only have sex when the female is actively fertile (except bonobos). Female chimpanzees only have sex every five years. The rest of the time they're pregnant or nursing, and without ovulation the males aren't interested. When opportunity knocks, it's a big deal. Brains good at navigating such hurdles got passed on, and natural selection produced a brain bent on doing whatever it takes to reproduce itself.
Happy chemicals evolved because they get us to do things that promote reproduction. That doesn't make sense in our world of birth control and sustainability pressures. But in the state of nature, lots of babies died, and you had to really focus on making babies to have a few that survived. You may not care about making babies, but your brain is inherited from those who did. Natural selection created a brain that rewards reproductive behavior with happy chemicals.
Love promotes reproduction, so it triggers a lot of happy chemicals. Sex is just one aspect of reproductive behavior. It's important—love motivates you to move mountains in order to be alone with that special someone. But the survivability of your offspring is what mattered to evolution. And that depends on building bonds of attachment, and competing for top quality mates. Of course, your love is above such biological banalities. But happy chemicals feel so good that your brain looks for ways to get more. Neurochemicals do their job without words, and we look for words to explain the crazy motivations they create in us.
Happy chemicals give us information that's hard to interpret. For example, if I watch a football game and burst with excitement when my team scores, I see thousands of others share my reaction. It feels like they understand me. Why doesn't my partner understand me when thousands of others do? The answer is simple. Spectator sports trigger oxytocin, as do politics, religion, and other group activities. You get a good feeling of trust. Of course, trusting a large number of people in a limited way is not the same as trusting one person in a comprehensive way. But to your mammal brain, it's all the same oxytocin.
We want all the happy chemicals we can get. You expect some from romance, and some from other aspects of life. But no matter where you get them, happy chemicals sag after they spurt. When you know why, you can manage your behavior despite the confusing neurochemical signals.
There's good news here. Don't blame yourself or your partner if you're not high on a happy chemicals all the time. Maybe nothing is wrong. You are just living with the operating system that has kept mammals alive for millions of years.
- Loretta Graziano Breuning, Ph.D. in Your Neurochemical Self
Saturday, February 11, 2012
浮生如梦
人生在世一蜉蝣，转眼乌头换白头。
百岁光阴能有几？一场笑谈没来由。
当年楚汉今何在？昔日萧曹尽已休。
南来北往走西东, 看见浮生总是空.
天也空来地也空, 人生渺渺在其中.
日也空来月也空, 来来往往有何功.
田也空来地也空, 换了多少主人翁.
金也空来银也空, 死后何曾在手中.
妻也空来子也空, 黄泉路上不相逢.
大藏经中空是色, 般若经中色是空.
朝走西来暮走东, 人生恰似采花蜂.
采得百花成蜜后, 到头辛苦一场空.
夜深听得三更鼓, 翻身不觉五更钟.
仔细从头思想起, 便是南柯一梦中!
-from another blog
百岁光阴能有几？一场笑谈没来由。
当年楚汉今何在？昔日萧曹尽已休。
南来北往走西东, 看见浮生总是空.
天也空来地也空, 人生渺渺在其中.
日也空来月也空, 来来往往有何功.
田也空来地也空, 换了多少主人翁.
金也空来银也空, 死后何曾在手中.
妻也空来子也空, 黄泉路上不相逢.
大藏经中空是色, 般若经中色是空.
朝走西来暮走东, 人生恰似采花蜂.
采得百花成蜜后, 到头辛苦一场空.
夜深听得三更鼓, 翻身不觉五更钟.
仔细从头思想起, 便是南柯一梦中!
-from another blog
Sunday, December 4, 2011
Verse For Repentance (忏悔文)
All the evil karma I have created in the past,
from beginningless greed, hatred and delusion,
that arose from my body, speech and mind,
for all these I now seek repentance and reformation.
- Samantabhadra Bodhisattva (Avatamsaka Sutra)
往昔所造诸恶业
皆由无始贪嗔痴
从身语意之所生
一切我今皆忏悔
- 普贤菩萨 (华严经)
from beginningless greed, hatred and delusion,
that arose from my body, speech and mind,
for all these I now seek repentance and reformation.
- Samantabhadra Bodhisattva (Avatamsaka Sutra)
往昔所造诸恶业
皆由无始贪嗔痴
从身语意之所生
一切我今皆忏悔
- 普贤菩萨 (华严经)
Thursday, November 10, 2011
「醒過來」； 「放下」
小和尚:施主~妳離我越近，我離佛越遠
女施主:小和尚~我就是佛祖的化身
禪堂中死一般的寂靜，寂靜得似乎空無一人，只有守關的老禪師心中清楚，參加這次閉關的四十名法師今天已經到了最後一關——破生死關；生死觀亦稱情欲關，情欲不斷，生死難了，但願這些法師今天能不出意外，順利過關。
就在守關老禪師擔憂默禱中，門外傳來了陣陣爭吵聲，是禪堂外護關的師父與一名女子在爭吵，老禪師輕輕打開房門想勸阻爭吵，可就在這時，那名女子猛地推開了房門，突然一步闖進了禪堂，
守關法師再想攔時已經遲了。
隨著門響四十位閉關的法師幾乎同時睜開了眼睛，他們被眼前的這位女子驚呆了，
一位亭亭玉立的美麗少女，是那樣的秀美、端莊、俏麗、輕盈，她的目光掃遍了每一位端坐的禪師，並報以淡雅溫柔的一笑，那攝人神魂的一瞥，那動人心魄的一笑，足以讓每一個見到她的人終生難忘。
守關的老禪師恭敬地合掌相問：「請問女施主進我禪堂，不知有何貴幹？」
少女:「阿彌陀佛！得知眾位法師在此閉關，我特來供養每位法師僧鞋一雙，請老禪師慈悲，滿我心願。」
老禪師:「既然如此，請施主將僧鞋留下，待出關之後老納替施主分發便是。」
少女輕輕一搖頭，含笑答道：「我發願將每雙僧鞋親自為法師們穿上，請禪師慈悲，這樣既滿了我的宿願，也滿了諸位法師的難言之願。」
此時禪堂中四十位法師一聽少女要親自為自己穿上僧鞋，無不怦然心動，個個面露欣喜之色。
老禪師無奈地歎息一聲，合掌應道：「既是如此，施主請便。」
少女輕移蓮步，依次為每一位法師躬身穿鞋，那姣美的笑臉，那柔軟的雙手，那阿娜的身姿，那沁人的幽香，使每個法師無不暗暗自慨：「能與此女相伴一日，死也足矣！」 當少女為最後一位法師穿好僧鞋，準備離開禪堂時，才發現禪堂的門已經被鎖死了，少女來到老禪師面前問道：「師父將小女子鎖在禪堂內，不知有何打算？我怎麼出去啊？」
老禪師面沉似水，冷冷說道:「你今天還打算出去嗎？」
少女:「是啊，僧鞋已經發完了，我也該回家了。」
老禪師:「寧攪千江水，莫動道人心！你今天攪擾了我禪堂內四十位法師的道心，你還打算活著走出禪堂嗎？」
少女驚慌地問道：:「我是來佈施僧鞋的，法師們見色動心，難道是我的錯嗎？快把門打開放我出去。」
老禪師:「放你出去很簡單，但你得把一樣東西留下。」
少女:「請問法師你想要把我的什麼東西留下？」
「你的命！」老法師斬釘截鐵地說。
少女淚眼流情、楚楚動人地跪倒在老禪師面前委屈地問道：「為什麼要我的命？」
老禪師:「因為你今天種了一個惡因，在你面前只有兩條路：
一 、你將四十世輪迴女身，分別嫁給這四十位因你而動心的法師，他們也將輪回在六道，不論他們投生在那一道中，你都得隨業嫁。
二、就是你今天死在這裏，斷了這四十世輪迴之因。」
少女驚恐地睜大了美麗的雙眼，任由委屈的淚水流下面頰，:「我再沒有別的選擇了嗎？」
「是的！兩條路由你自己選。」老禪師堅決地回答道。
少女緩緩地對老禪師說道：「麻煩您給我找一條絲絛，我寧可把命留下，也不願再輪迴四十世女身。」
聽到少女的話，禪堂裏的四十位元法師全部驚呆了，看到剛才還是嫵媚動人的少女如今卻是神色凝重地手持絲絛，慢慢地走向門前去結束自己美麗而寶貴生命，無不為之惋惜。
少女自盡了，就吊死在禪堂門前的橫樑上，那曾經是春情勃動的生命，如今已灰飛煙滅，那曾經豔如花蕊的臉龐，如今已蒼白冷漠，但仍不失她的美麗。
三天以後，少女的屍身開始散發出腐臭，蒼白美麗的面頰也變了顏色，可老禪師就像什麼也沒發生過一樣，每天護守著禪堂內這四十位閉關的師父們。隨著時間一天天的推移，少女的屍身一天天也在發生著變化，
原本婀娜苗條的身軀，現在已經腐爛的臃腫不堪，那曾經令人心動的面孔如今變成淡綠色，不斷滲出的腐液，散發著令人作嘔的惡臭，閉關的師父們已經無法忍受了，想要請老禪師打開門窗換換空氣，並把這具女屍移出去，可老禪師仍然像無事人一樣，繼續無言地守候在禪堂內。
第七天，四十位閉關的師父們，面對著這具奇臭無比又令人恐怖的女屍再也忍無可忍的時侯，女屍身上的一塊腐肉脫落了，裙子和褲子也同時脫落了，這時大家才看清，腐肉脫落的地方露出了駭人的白骨，上面爬滿了蠕動的腐蛆。大家再也控制不住了，幾乎是同時作嘔起來。
老禪師緩緩地從蒲團上起來，面對大家冷冷地說道：「大家想要出禪堂嗎？」
「對！」四十個人同聲回答。
老禪師：「那好，誰能回答上我的問題，就可以出去了，想回答的請舉手。」
四十個師父同時舉手。
老禪師回手一指身邊的女屍問道：「她是誰？」
四十個閉關的師父全愣住了，啞口無言。
老禪師站在女屍面前大聲問道：：「告訴我，她是誰？是那個令你們神魂顛倒想入非非的少女嗎？」
「不是！」回答整齊！
老禪師：「現在你還打算和她廝守終生嗎？」
「不！」異口同聲！
老禪師：「這個世界上還有讓你們值得動心的女人嗎？」
「沒有了！」斬釘截鐵！
老禪師大手一揮:「好，出關！」
女屍身上蒙著一塊黃布，被四十個出關的師父們抬出來了，師父們並沒有散去，因為他們心中還有一個結：「她是誰？」
老禪師神情莊重地帶領著大家向停放在地上的女屍頂禮匐拜後，對大家說：「你們不是想要知道她究竟是誰嗎？我走以後，你們自己看吧。」說完老禪師轉身走回了自己的寮房。
當大家緊張地掀起蓋在女屍身上的黃布時，全部驚呆了，這哪裡是他們抬出來的腐爛女屍啊？
原來是寺院裏的一尊觀世音菩薩聖像，大家恭敬地把觀音菩薩聖像安頓好後，才想起應該問問老禪師是怎麼知道的？
大家發瘋般地跑到老禪師的寮房時，老禪師已經圓寂坐化了。
禪，留給我們的是啟示，不是遺憾。
醒過來
這個世界上有太多煩惱，
所以有許多人，不約而同地問了佛祖一樣的問題：
「我該怎麼做，才能不再煩憂？」
佛祖給的答案都相同：
「只要放下，你就能不再煩惱。」
有個自以為聰明的人很不服氣，
便專程去找佛祖，挑釁地問：
「世上有千千萬萬個人，就有千千萬萬種煩惱。
但是您給他們的解決方式都完全相同，那豈不是太可笑了？」
佛祖沒有生氣，只是反問男子：
「你晚上睡覺的時候，會做夢嗎？」
「當然會！」男子回答。
「那麼，你每天晚上做的夢，都是一樣的嗎？」佛祖又問。
「當然是不一樣的。」
「你睡了千千萬萬次，就做了千千萬萬個夢。」
佛祖微笑地說：
「但是要結束夢的方法，卻都是一樣的，
那就是：『醒過來』！」
男子聽到佛祖的回答，啞口無言。
我很喜歡這則禪宗故事。
這則故事把煩惱比喻成「夢」，只要我們願意放下，
就能從夢中清醒來。
無論你的煩惱是什麼，方法都是一樣的。
~~~~~~~~~~~~~~~~~
我當義工的時候，分別探訪過兩個老婦人。
她們的人生際遇有驚人的雷同：
都自小喪母，成為別人的養女；
都嫁了一個酗酒的老公；兒子都很不孝順；
兩人身體都不好，晚年都在洗腎。
然而，她們兩人的心境卻大不相同。
第一個老婦人談及往事，她處之泰然。
她說種種的不順遂，是她人生的功課，現在她年紀大了，
該吃的苦都吃過了，所以她覺得自己真好運，
人生像倒吃甘蔗，愈來愈順利。
這名老婦人，現在是某公益團體的義工。
第二個老婦人談及往事，仍然咬牙切齒。
她指天怪地，罵兒子詛咒媳婦，她說老天爺對她真不公平！
這名老婦人，也跟那個公益團體有關，但她不是義工，
而是受到義工關懷的憂鬱症患者。
讓我印象深刻的，是她們兩個臉上的表情、
散發的氣息形成了強烈的對比。
當下讓我感覺： 中國人說的「相由心生」，真的非常有道理。
當義工的老太太，因為已經放下了煩惱，
所以給人的感覺是祥和又親切，
讓人很想親近，表情有如菩薩。
得憂鬱症的老婦人，還把多年來的不順遂、痛苦扛在肩上，
她的氣息尖銳又暴烈，讓人避之唯恐不及，表情如同厲鬼。
然而，對於後者，其實我是深刻地同情的。
她的一輩子都在吃苦，但她不但不願意放下那些苦，
還要抱著那些其實已經遠離的苦難不放，讓它們繼續折磨自己。
也許，人生真的有太多無法逆轉的苦難、無法挽回的遺憾。
也許在夜闌人靜的時候，我們會因此哭泣，覺得蒼天真是無情，
竟然讓我承受如此巨大的痛苦……
但是，你我都不應該忘記，
能將我們從痛苦的地獄拯救出來的，
絕對不是別人，只有我們自己。
人生有太多包袱，
我們可以選擇將它一一扛在肩上，
也能選擇瀟灑地放下它們，
而能否放下，則會決定我們未來的人生，將繼續痛苦，還是可以享有幸福。
想擺脫惡夢的糾纏，唯一的方式是「醒過來」；
想忘卻人生的不順遂，唯一的方法就是「放下」。
醒過來，須苦到極點，痛到極處，才能省悟，反省其因。
放下呢，談兒蝾易，其功夫深徹，
一、必須有知苦而願離苦之愿，
二、面對真實，接受一切苦，明瞭一切無法避免。
三，反省、檢討一切來去姻緣。
四、而後圓融，寬恕，至知。
最後才能真正德放下喔！
-adapted from a facebook post
女施主:小和尚~我就是佛祖的化身
禪堂中死一般的寂靜，寂靜得似乎空無一人，只有守關的老禪師心中清楚，參加這次閉關的四十名法師今天已經到了最後一關——破生死關；生死觀亦稱情欲關，情欲不斷，生死難了，但願這些法師今天能不出意外，順利過關。
就在守關老禪師擔憂默禱中，門外傳來了陣陣爭吵聲，是禪堂外護關的師父與一名女子在爭吵，老禪師輕輕打開房門想勸阻爭吵，可就在這時，那名女子猛地推開了房門，突然一步闖進了禪堂，
守關法師再想攔時已經遲了。
隨著門響四十位閉關的法師幾乎同時睜開了眼睛，他們被眼前的這位女子驚呆了，
一位亭亭玉立的美麗少女，是那樣的秀美、端莊、俏麗、輕盈，她的目光掃遍了每一位端坐的禪師，並報以淡雅溫柔的一笑，那攝人神魂的一瞥，那動人心魄的一笑，足以讓每一個見到她的人終生難忘。
守關的老禪師恭敬地合掌相問：「請問女施主進我禪堂，不知有何貴幹？」
少女:「阿彌陀佛！得知眾位法師在此閉關，我特來供養每位法師僧鞋一雙，請老禪師慈悲，滿我心願。」
老禪師:「既然如此，請施主將僧鞋留下，待出關之後老納替施主分發便是。」
少女輕輕一搖頭，含笑答道：「我發願將每雙僧鞋親自為法師們穿上，請禪師慈悲，這樣既滿了我的宿願，也滿了諸位法師的難言之願。」
此時禪堂中四十位法師一聽少女要親自為自己穿上僧鞋，無不怦然心動，個個面露欣喜之色。
老禪師無奈地歎息一聲，合掌應道：「既是如此，施主請便。」
少女輕移蓮步，依次為每一位法師躬身穿鞋，那姣美的笑臉，那柔軟的雙手，那阿娜的身姿，那沁人的幽香，使每個法師無不暗暗自慨：「能與此女相伴一日，死也足矣！」 當少女為最後一位法師穿好僧鞋，準備離開禪堂時，才發現禪堂的門已經被鎖死了，少女來到老禪師面前問道：「師父將小女子鎖在禪堂內，不知有何打算？我怎麼出去啊？」
老禪師面沉似水，冷冷說道:「你今天還打算出去嗎？」
少女:「是啊，僧鞋已經發完了，我也該回家了。」
老禪師:「寧攪千江水，莫動道人心！你今天攪擾了我禪堂內四十位法師的道心，你還打算活著走出禪堂嗎？」
少女驚慌地問道：:「我是來佈施僧鞋的，法師們見色動心，難道是我的錯嗎？快把門打開放我出去。」
老禪師:「放你出去很簡單，但你得把一樣東西留下。」
少女:「請問法師你想要把我的什麼東西留下？」
「你的命！」老法師斬釘截鐵地說。
少女淚眼流情、楚楚動人地跪倒在老禪師面前委屈地問道：「為什麼要我的命？」
老禪師:「因為你今天種了一個惡因，在你面前只有兩條路：
一 、你將四十世輪迴女身，分別嫁給這四十位因你而動心的法師，他們也將輪回在六道，不論他們投生在那一道中，你都得隨業嫁。
二、就是你今天死在這裏，斷了這四十世輪迴之因。」
少女驚恐地睜大了美麗的雙眼，任由委屈的淚水流下面頰，:「我再沒有別的選擇了嗎？」
「是的！兩條路由你自己選。」老禪師堅決地回答道。
少女緩緩地對老禪師說道：「麻煩您給我找一條絲絛，我寧可把命留下，也不願再輪迴四十世女身。」
聽到少女的話，禪堂裏的四十位元法師全部驚呆了，看到剛才還是嫵媚動人的少女如今卻是神色凝重地手持絲絛，慢慢地走向門前去結束自己美麗而寶貴生命，無不為之惋惜。
少女自盡了，就吊死在禪堂門前的橫樑上，那曾經是春情勃動的生命，如今已灰飛煙滅，那曾經豔如花蕊的臉龐，如今已蒼白冷漠，但仍不失她的美麗。
三天以後，少女的屍身開始散發出腐臭，蒼白美麗的面頰也變了顏色，可老禪師就像什麼也沒發生過一樣，每天護守著禪堂內這四十位閉關的師父們。隨著時間一天天的推移，少女的屍身一天天也在發生著變化，
原本婀娜苗條的身軀，現在已經腐爛的臃腫不堪，那曾經令人心動的面孔如今變成淡綠色，不斷滲出的腐液，散發著令人作嘔的惡臭，閉關的師父們已經無法忍受了，想要請老禪師打開門窗換換空氣，並把這具女屍移出去，可老禪師仍然像無事人一樣，繼續無言地守候在禪堂內。
第七天，四十位閉關的師父們，面對著這具奇臭無比又令人恐怖的女屍再也忍無可忍的時侯，女屍身上的一塊腐肉脫落了，裙子和褲子也同時脫落了，這時大家才看清，腐肉脫落的地方露出了駭人的白骨，上面爬滿了蠕動的腐蛆。大家再也控制不住了，幾乎是同時作嘔起來。
老禪師緩緩地從蒲團上起來，面對大家冷冷地說道：「大家想要出禪堂嗎？」
「對！」四十個人同聲回答。
老禪師：「那好，誰能回答上我的問題，就可以出去了，想回答的請舉手。」
四十個師父同時舉手。
老禪師回手一指身邊的女屍問道：「她是誰？」
四十個閉關的師父全愣住了，啞口無言。
老禪師站在女屍面前大聲問道：：「告訴我，她是誰？是那個令你們神魂顛倒想入非非的少女嗎？」
「不是！」回答整齊！
老禪師：「現在你還打算和她廝守終生嗎？」
「不！」異口同聲！
老禪師：「這個世界上還有讓你們值得動心的女人嗎？」
「沒有了！」斬釘截鐵！
老禪師大手一揮:「好，出關！」
女屍身上蒙著一塊黃布，被四十個出關的師父們抬出來了，師父們並沒有散去，因為他們心中還有一個結：「她是誰？」
老禪師神情莊重地帶領著大家向停放在地上的女屍頂禮匐拜後，對大家說：「你們不是想要知道她究竟是誰嗎？我走以後，你們自己看吧。」說完老禪師轉身走回了自己的寮房。
當大家緊張地掀起蓋在女屍身上的黃布時，全部驚呆了，這哪裡是他們抬出來的腐爛女屍啊？
原來是寺院裏的一尊觀世音菩薩聖像，大家恭敬地把觀音菩薩聖像安頓好後，才想起應該問問老禪師是怎麼知道的？
大家發瘋般地跑到老禪師的寮房時，老禪師已經圓寂坐化了。
禪，留給我們的是啟示，不是遺憾。
醒過來
這個世界上有太多煩惱，
所以有許多人，不約而同地問了佛祖一樣的問題：
「我該怎麼做，才能不再煩憂？」
佛祖給的答案都相同：
「只要放下，你就能不再煩惱。」
有個自以為聰明的人很不服氣，
便專程去找佛祖，挑釁地問：
「世上有千千萬萬個人，就有千千萬萬種煩惱。
但是您給他們的解決方式都完全相同，那豈不是太可笑了？」
佛祖沒有生氣，只是反問男子：
「你晚上睡覺的時候，會做夢嗎？」
「當然會！」男子回答。
「那麼，你每天晚上做的夢，都是一樣的嗎？」佛祖又問。
「當然是不一樣的。」
「你睡了千千萬萬次，就做了千千萬萬個夢。」
佛祖微笑地說：
「但是要結束夢的方法，卻都是一樣的，
那就是：『醒過來』！」
男子聽到佛祖的回答，啞口無言。
我很喜歡這則禪宗故事。
這則故事把煩惱比喻成「夢」，只要我們願意放下，
就能從夢中清醒來。
無論你的煩惱是什麼，方法都是一樣的。
~~~~~~~~~~~~~~~~~
我當義工的時候，分別探訪過兩個老婦人。
她們的人生際遇有驚人的雷同：
都自小喪母，成為別人的養女；
都嫁了一個酗酒的老公；兒子都很不孝順；
兩人身體都不好，晚年都在洗腎。
然而，她們兩人的心境卻大不相同。
第一個老婦人談及往事，她處之泰然。
她說種種的不順遂，是她人生的功課，現在她年紀大了，
該吃的苦都吃過了，所以她覺得自己真好運，
人生像倒吃甘蔗，愈來愈順利。
這名老婦人，現在是某公益團體的義工。
第二個老婦人談及往事，仍然咬牙切齒。
她指天怪地，罵兒子詛咒媳婦，她說老天爺對她真不公平！
這名老婦人，也跟那個公益團體有關，但她不是義工，
而是受到義工關懷的憂鬱症患者。
讓我印象深刻的，是她們兩個臉上的表情、
散發的氣息形成了強烈的對比。
當下讓我感覺： 中國人說的「相由心生」，真的非常有道理。
當義工的老太太，因為已經放下了煩惱，
所以給人的感覺是祥和又親切，
讓人很想親近，表情有如菩薩。
得憂鬱症的老婦人，還把多年來的不順遂、痛苦扛在肩上，
她的氣息尖銳又暴烈，讓人避之唯恐不及，表情如同厲鬼。
然而，對於後者，其實我是深刻地同情的。
她的一輩子都在吃苦，但她不但不願意放下那些苦，
還要抱著那些其實已經遠離的苦難不放，讓它們繼續折磨自己。
也許，人生真的有太多無法逆轉的苦難、無法挽回的遺憾。
也許在夜闌人靜的時候，我們會因此哭泣，覺得蒼天真是無情，
竟然讓我承受如此巨大的痛苦……
但是，你我都不應該忘記，
能將我們從痛苦的地獄拯救出來的，
絕對不是別人，只有我們自己。
人生有太多包袱，
我們可以選擇將它一一扛在肩上，
也能選擇瀟灑地放下它們，
而能否放下，則會決定我們未來的人生，將繼續痛苦，還是可以享有幸福。
想擺脫惡夢的糾纏，唯一的方式是「醒過來」；
想忘卻人生的不順遂，唯一的方法就是「放下」。
醒過來，須苦到極點，痛到極處，才能省悟，反省其因。
放下呢，談兒蝾易，其功夫深徹，
一、必須有知苦而願離苦之愿，
二、面對真實，接受一切苦，明瞭一切無法避免。
三，反省、檢討一切來去姻緣。
四、而後圓融，寬恕，至知。
最後才能真正德放下喔！
-adapted from a facebook post
Sunday, October 2, 2011
The 4 Basic Elements Of Stock Value
The ancient Greeks proposed earth, fire, water and air as the main building blocks of all matter, and classified all things as a mixture of these elements. Investing has a similar set of four basic elements that investors use to break down a stock's value. In this article, we will look at the four ratios and what they can tell you about a stock.
Earth: The Price-to-Book Ratio (P/B)
Made for glass-half-empty people, the price-to-book (P/B) ratio represents the value of the company if it is torn up and sold today. This is useful to know because many companies in mature industries falter in terms of growth but can still be a good value based on their assets. The book value usually includes equipment, buildings, land and anything else that can be sold, including stock holdings and bonds. With purely financial firms, the book value can fluctuate with the market as these stocks tend to have a portfolio of assets that goes up and down in value. Industrial companies tend to have a book value based more in physical assets, which depreciate year after year according to accounting rules. In either case, a low P/B ratio can protect you - but only if it's accurate. This means an investor has to look deeper into the actual assets making up the ratio.
Fire: Price-to-Earnings Ratio (P/E)
The price to earnings (P/E) ratio is possibly the most scrutinized of all the ratios. If sudden increases in a stock's price are the sizzle, then the P/E ratio is the steak. A stock can go up in value without significant earnings increases, but the P/E ratio is what decides if it can stay up. Without earnings to back up the price, a stock will eventually fall back down.
The reason for this is simple: a P/E ratio can be thought of as how long a stock will take to pay back your investment if there is no change in the business. A stock trading at $20 per share with earning of $2 per share has a P/E ratio of 10, which is sometimes seen as meaning that you'll make your money back in 10 years if nothing changes. The reason stocks tend to have high P/E ratios is that investors try to predict which stocks will enjoy progressively larger earnings. An investor may buy a stock with a P/E ratio of 30 if he or she thinks it will double its earnings every year (shortening the payoff period significantly). If this fails to happen, then the stock will fall back down to a more reasonable P/E ratio. If the stock does manage to double earnings, then it will likely continue to trade at a high P/E ratio. You should only compare P/E ratios between companies in similar industries and markets.
Air: The PEG Ratio
Because the P/E ratio isn't enough in and of itself, many investors use the price to earnings growth (PEG) ratio. Instead of merely looking at the price and earnings, the PEG ratio incorporates the historical growth rate of the company's earnings. This ratio also tells you how your stock stacks up against another stock. The PEG ratio is calculated by taking the P/E ratio of a company and dividing it by the year-over-year growth rate of its earnings. The lower the value of your PEG ratio, the better the deal you're getting for the stock's future estimated earnings.
By comparing two stocks using the PEG, you can see how much you're paying for growth in each case. A PEG of 1 means you're breaking even if growth continues as it has in the past. A PEG of 2 means you're paying twice as much for projected growth when compared to a stock with a PEG of 1. This is speculative because there is no guarantee that growth will continue as it has in the past. The P/E ratio is a snap shot of where a company is and the PEG ratio is a graph plotting where it has been. Armed with this information, an investor has to decide whether it is likely to continue in that direction.
Water: Dividend Yield
It's always nice to have a back-up when a stock's growth falters. This is why dividend-paying stocks are attractive to many investors - even when prices drop you get a paycheck. The dividend yield shows how much of a payday you're getting for your money. By dividing the stock's annual dividend by the stock's price, you get a percentage. You can think of that percentage as the interest on your money, with the additional chance at growth through the appreciation of the stock.
Although simple on paper, there are some things to watch for with the dividend yield. Inconsistent dividends or suspended payments in the past mean that the dividend yield can't be counted on. Like the water element, dividends can ebb and flow, so knowing which way the tide is going - like whether dividend payments have increased year over year - is essential to making the decision to buy. Dividends also vary by industry, with utilities and some banks paying a lot whereas tech firms invest almost all their earnings back into the company to fuel growth.
No Element Stands Alone
P/E, P/B, PEG and dividend yields are too narrowly focused to stand alone as a single measure of a stock. By combining these methods of valuation, you can get a better view of a stock's worth. Any one of these can be influenced by creative accounting - as can more complex ratios like cash flow. As you add more tools to your valuation methods though, discrepancies get easier to spot. From the Greeks' four basic elements, we now have more than 100, some of which exist so briefly that we wonder if they count, and none of them are named water, earth, air, or fire. In investing, however, these four main ratios may be overshadowed by thousands of customized metrics, but they will always be useful stepping stones for finding out whether a stock's worth buying.
- Investopedia, Andrew Beattie
Earth: The Price-to-Book Ratio (P/B)
Made for glass-half-empty people, the price-to-book (P/B) ratio represents the value of the company if it is torn up and sold today. This is useful to know because many companies in mature industries falter in terms of growth but can still be a good value based on their assets. The book value usually includes equipment, buildings, land and anything else that can be sold, including stock holdings and bonds. With purely financial firms, the book value can fluctuate with the market as these stocks tend to have a portfolio of assets that goes up and down in value. Industrial companies tend to have a book value based more in physical assets, which depreciate year after year according to accounting rules. In either case, a low P/B ratio can protect you - but only if it's accurate. This means an investor has to look deeper into the actual assets making up the ratio.
Fire: Price-to-Earnings Ratio (P/E)
The price to earnings (P/E) ratio is possibly the most scrutinized of all the ratios. If sudden increases in a stock's price are the sizzle, then the P/E ratio is the steak. A stock can go up in value without significant earnings increases, but the P/E ratio is what decides if it can stay up. Without earnings to back up the price, a stock will eventually fall back down.
The reason for this is simple: a P/E ratio can be thought of as how long a stock will take to pay back your investment if there is no change in the business. A stock trading at $20 per share with earning of $2 per share has a P/E ratio of 10, which is sometimes seen as meaning that you'll make your money back in 10 years if nothing changes. The reason stocks tend to have high P/E ratios is that investors try to predict which stocks will enjoy progressively larger earnings. An investor may buy a stock with a P/E ratio of 30 if he or she thinks it will double its earnings every year (shortening the payoff period significantly). If this fails to happen, then the stock will fall back down to a more reasonable P/E ratio. If the stock does manage to double earnings, then it will likely continue to trade at a high P/E ratio. You should only compare P/E ratios between companies in similar industries and markets.
Air: The PEG Ratio
Because the P/E ratio isn't enough in and of itself, many investors use the price to earnings growth (PEG) ratio. Instead of merely looking at the price and earnings, the PEG ratio incorporates the historical growth rate of the company's earnings. This ratio also tells you how your stock stacks up against another stock. The PEG ratio is calculated by taking the P/E ratio of a company and dividing it by the year-over-year growth rate of its earnings. The lower the value of your PEG ratio, the better the deal you're getting for the stock's future estimated earnings.
By comparing two stocks using the PEG, you can see how much you're paying for growth in each case. A PEG of 1 means you're breaking even if growth continues as it has in the past. A PEG of 2 means you're paying twice as much for projected growth when compared to a stock with a PEG of 1. This is speculative because there is no guarantee that growth will continue as it has in the past. The P/E ratio is a snap shot of where a company is and the PEG ratio is a graph plotting where it has been. Armed with this information, an investor has to decide whether it is likely to continue in that direction.
Water: Dividend Yield
It's always nice to have a back-up when a stock's growth falters. This is why dividend-paying stocks are attractive to many investors - even when prices drop you get a paycheck. The dividend yield shows how much of a payday you're getting for your money. By dividing the stock's annual dividend by the stock's price, you get a percentage. You can think of that percentage as the interest on your money, with the additional chance at growth through the appreciation of the stock.
Although simple on paper, there are some things to watch for with the dividend yield. Inconsistent dividends or suspended payments in the past mean that the dividend yield can't be counted on. Like the water element, dividends can ebb and flow, so knowing which way the tide is going - like whether dividend payments have increased year over year - is essential to making the decision to buy. Dividends also vary by industry, with utilities and some banks paying a lot whereas tech firms invest almost all their earnings back into the company to fuel growth.
No Element Stands Alone
P/E, P/B, PEG and dividend yields are too narrowly focused to stand alone as a single measure of a stock. By combining these methods of valuation, you can get a better view of a stock's worth. Any one of these can be influenced by creative accounting - as can more complex ratios like cash flow. As you add more tools to your valuation methods though, discrepancies get easier to spot. From the Greeks' four basic elements, we now have more than 100, some of which exist so briefly that we wonder if they count, and none of them are named water, earth, air, or fire. In investing, however, these four main ratios may be overshadowed by thousands of customized metrics, but they will always be useful stepping stones for finding out whether a stock's worth buying.
- Investopedia, Andrew Beattie
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