Qualitative Analysis 1. Do I understand the business? Yes, Netflix is a streaming video on demand service that uses a subscription model, but is incorporating ads. We will discuss ads more at the end. 2. Will the company be around in 5-10 years? 5 years is an easy yes. 10 or 20 years things get … Read more
In my post Can You Time the Market?, I used a coin that was weighted 60/40 as an analogy for the stock market. I took for granted that any rational person would always choose Heads if the odds were 60/40 in Heads’ favor. I was wrong. In Hersh Shefrin’s book “Beyond Greed and Fear – … Read more
No. It’s random in the short-run. Here’s an analogy I use. Imagine you had a coin. 60% of the time it’ll land heads and 40% of the time it’ll land tails. If every time you predict heads, you’re going to do very well for yourself in the long run. But that isn’t good enough for … Read more
You’ve probably heard that the US GDP grew at 2% last year. That’s the real growth rate. The nominal growth rate would be 2% plus inflation. So in other words, real growth rates are corrected for inflation. So if I say the real GDP growth rate has been 2%, then that is after taking inflation … Read more
It’s pretty complicated, so I stay away. Essentially you have to know what companies hold which patents. How defensible are those patents? How long until those patents expire? What drugs do companies have in the testing pipeline? How likely are they to pass clinics and reach market? When will they reach the market? And even … Read more
Well, this will be a shorter post than usual. All I know about the oil industry is essentially two things: 1) There’s drilling and refining. 2) Oil is a commodity. Number 1 means that every oil company essentially has two segments: the drilling & exploration and then the refining. Every major oil company engages in … Read more
In the long run, do you really think it matters that much if you buy at $128 or $123? Quick example: Let’s say you buy at $123 and it gives you a 10% return for 10 years. If you had paid $128 instead, it’d be a 9.6% return. Point being, don’t get caught up in … Read more
You are a den of vipers and thieves! I intend to rout you out, and by the grace of the Eternal God, will rout you out! – Andrew Jackson to the 2nd Federal Reserve This article is less an inditement on WFC as an investment and more of an inditement on me as an investor. … Read more
Any fool can learn from his own mistake, but a wise man learns from someone else’s. My eyes glaze over and my nose turns up whenever someone makes macroeconomic predictions. One cannot overstate the repulsion I feel. The hubris! I always want to say, “you should write down all your predictions, just so you can … Read more
Legacy Positions: AAPL – Slow growth cyclical business that goes on sale during off product cycle years. Huge net cash hoard has historically made this stock cheaper than it screens, but still trading at higher multiples than its growth can justify. DIS – Slow growth business with major headwinds not fully priced in. ESPN —not … Read more