Banks’ reported returns on tangible common equity are a con game
JPMorgan Chase reported strong results in the fourth quarter as we earned $11.0 billion in net income…and an ROTCE of 20%
intangible assets
The Achilles heel of the quantitative analysis of stocks
Something that knocks the pins out from our normal understanding of price earnings ratios, return on invested capital, discounted cash flow analysis, smart beta/factor ETFs, value at risk models (VAR) and even company financial statements
Buffett’s concept of economic goodwill vs accounting goodwill
Sunkenness – intangible investments tend to be worth less if they go wrong
Disagreeing with Jeremy Grantham’s bubble call
Among other factors, indicators of extremes of euphoria seem much more important than price
Negative free cash flow can be desirable
Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes
CAPE’s halo falls with a thud
CAPE is ignorant of interest rates
The emergence of a new model of capitalism
The first step for investors is to come to a new understanding of reported earnings and the book value of equity.
My thoughts about GMO’s ‘GROWTH BUBBLE’
Using trailing twelve months earnings that are impacted by a recession is a mistake
Heart of stock valuation: subtleties of free cash flow
If a company’s capital expenditures are simply maintaining the company’s position in its markets, it free cash flow may be unduly high
Stock valuation in an age of intangible assets
About forty years ago Buffett experienced a Damascene conversion
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