Nuggets of Investing Wisdom

Nuggets of Investing Wisdom

A website for serious investors in common stocks

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return on equity

Negative free cash flow can be desirable

  • by Rodney Smith
  • Posted on July 24, 2022July 24, 2022
  • Part 6: The Hallmarks of Superb Businesses

Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes

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Profound errors in interpreting and using ROE and ROC

  • by Rodney Smith
  • Posted on May 30, 2022May 31, 2022
  • Part 6: The Hallmarks of Superb Businesses

I find it better to analyze a company’s cash flows, maintenance capex, growth capex and free cash flow in real dollar terms and measure them against the true value of the capital management has use of

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The emergence of a new model of capitalism

  • by Rodney Smith
  • Posted on December 26, 2021December 26, 2021
  • Part 6: The Hallmarks of Superb Businesses

The first step for investors is to come to a new understanding of reported earnings and the book value of equity.

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Stock valuation in an age of intangible assets

  • by Rodney Smith
  • Posted on November 29, 2020December 1, 2020
  • Part 7: Building and Managing a Portfolio

About forty years ago Buffett experienced a Damascene conversion

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The fading usefulness of book value

  • by Rodney Smith
  • Posted on August 1, 2019November 22, 2020
  • Part 6: The Hallmarks of Superb Businesses

Book Value – Ain’t what it used to be – With the rise of company investment in intangibles, book value is losing its relevance.
Something over 80% of the market capitalization of the S&P 500 is made up of intangibles. Only a fraction of that appears on balance sheets.

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