Here’s a secret that academics don’t talk about


A company’s future ROE / ROA / ROIC is unlikely to be the same as history,especially if management allocates capital badly Meaning I’m no fan of all that Sustainable Growth Rate (SGR) stuff But before we tackle an example, a quick recap The SGR = how much the company retains (1- dividend payout ratio) x … Read on

Disney hit the lowest price in a year – down 59% since March ’21


Disney hit the lowest price in a year – down 59% since March ’21 How? Isn’t it a “great business” with “excellent management”? I thought “great businesses” meant “great share prices” Nope But their parks & ships must be pumping with post-COVID vacations,Disney+ has over 100m subs and they own the best sports content in … Read on

Wow, 56bn!


Is that Nvidia’s net income? No, that was $6.1bn Is that their revenue? No, that was $13.5bn It’s not the market cap because I know that’s a mighty $1.2 trillion So, what’s $56bn? The value of Nvidia’s shares that traded yesterday – equal to the market cap of Heineken Wow, people really wanted those shares! … Read on

Imagine it’s 1965 and you want to back this Investor you’ve just uncovered


So you hire a consultant for their “expert” view They conclude his investment philosophy is sound because he buys undervalued companies, his track record is excellent and he’s a person of integrity But you shouldn’t invest …. because “What if something happens to Warren?” Meaning your $1000 didn’t compound to $18m today… Or it’s 2010 … Read on

I’m worried


What are you worried about? I’m worried about the “markets” being expensive, and worried about a recession, and worried about inflation, and worried about what the Fed might do next That’s a lot of worries, so let’s look at each one If you own the “market” via large US index ETFs or a fund that … Read on

I see May was a tough month for you Value guys, you must be suffering a bad dose of “FOMO” with all these #ai -related moves


Not at all – I suffer from “FOMOL” not #FOMO What’s “FOMOL”, never heard of it? “Fear Of Making Oversized Losses” Homegrown – keeps me safe Because if you’d “suffered” from FOMOL instead of FOMO in 2019 when “plant-based” was the “next megatrend” and Beyond Meat’s $300m of revenue was apparently worth a “Beyond ridiculous” $14bn … Read on

Wow, $220bn is a massive number!


The size of Bank of America, orTwo Caterpillars, orDeere + American Expresses, orFedex + Heineken + Colgate Palmolive + Yum Brands Sorry, what is? $220bn – the increase in value of Nvidia’s market cap after hours The increase, not the entire value of the next Trillionaire Yes, but it’s because of AI – that’s been … Read on