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Investment philosophy: Don’t predict earnings, find companies with predictable earnings
By Don't anyhow  •  December 3, 2015
Investment philosophy The price of stocks are a sum of three parts 1) Quality of the company 2) Future earnings of the company 3) Value of the stock 1) Quality of the company - Quality of the company consists of 2 components - The current industry the stock is in - The historical/current financial health of the company The current industry the stock is in involves checklists such as - Stability of the industry - Monopolistic/Oligopolistic nature of the company - Company's branding The historical/current financial health of the company - Earnings track record (net margins, volatility in earnings, historical growth etc) - Debt (interest coverage, D/E etc) - Productivity (ROE, ROA) - Cash flow (FCF, growth of OCF, expenditure on capex) Summary: The quality of the company is used as a screen to find out which companies to look at. As a retail investor/long term holder we do not ......
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By Don't anyhow
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