What Fund Managers are Saying about the Current Environment
The year 2020 has been interesting, to say the least. With the market crashing down at an astonishing speed, and then shooting back up within a short period of time….
How to Analyze SaaS Companies
Despite most of the SaaS companies commanding lofty valuations, not all of them will meet the high expectations set out by investors. We have to first ask ourselves if this…
How to Screen for High-Quality Compounders?
Using the gross profitability method, a dollar invested in the market between 1973 to 2011 grew to over $80. While the same dollar invested in businesses that have high gross…
Amazon and the Problem with Reported Earnings
Where the key value driver of a company is in intangible investments, investors need to look beyond reported earnings. Especially for innovative companies in their early stage as they invest…
How to Find the Next Multi-Bagger by Understanding Operating Expenses
Reported earnings of high growth companies are often misunderstood by investors. Current earnings do not equate to real earning power.
Companies that are growing rapidly often reinvest heavily and their…
Analyzing the Gross Profit Margin
Reading the financial statements may be daunting for beiginners. This post will bring you through revenue, cost of goods and gross profit with case studies such as Costco, L Brands,…
Operating Leverage – How It Caused GameStop (GME) to Plunge into the Red
Operating leverage is a measurement of how an additional dollar of sales translates into operating profit. A 10% increase in sales may result in a 30% increase in net profits….
Focus on Total Returns, Not Income Investing
The desperate search for yield has led to a number of people choosing to invest in income funds, or in mature companies providing a high dividend yield. On the surface,…
Figuring out a Company’s Intrinsic Value with PE Ratio
The price-earnings (P/E) multiple has been one of the most popular tool analysts use to value stocks. A company trading at 10x P/E implies that investors are willing to pay…
What Makes Mastercard a Compounding Machine?
Investors who held Mastercard for the past 10 years, have been rewarded handsomely with a 27.4% returns compounded annually. A $10,000 investment would have returned approximately $113,000 over this period….
My Key Takeaway from Berkshire’s AGM 2020
Warren Buffett started the Annual General Meeting (AGM) with a seemingly bullish stance, diving into America’s history and how it always emerged stronger. Despite painting a rosy image, it is…
Facebook’s Q1’20 Earnings Update
Increased engagement due to shelter-in-place measures but some of this increased engagement will be lost once measures are relaxed in the future. Engagement increased by ~10% YOY across all measurements,…