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💰ROIC Demystified: Videos, Articles & CFO Insights
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Hey Reader, Over the long term, it's hard for a stock to earn a much better return than the business which underlies it earns. If the business earns 6% on capital over 40 years and you hold it for that 40 years, you're not going to make much different than a 6% return -- even if you originally buy it at a huge discount. Conversely, if a business earns 18% on capital over 20 or 30 years, even if you pay an expensive-looking price, you'll end up with one hell of a result. In today's issue:
💸Sponsored by: Investing is hard. Trying to pick individual stocks takes time and effort. But what if you could find someone to do the work for you? Well.....that's exactly what Andrew does at Value Spotlight. He spends time reading the financials, listening to earnings calls, analyzing the industry, valuing companies, and considering the potential downside. All the necessary ingredients to buy individual companies. Outsource your investments and save time for what you want to do with Value Spotlight. 💎NUGGETS My Favorite Finds 📖 How to calculate Return on Invested Capital from Michael Mauboussin. The gold standard. 🎥 Great video from Andrew breaking down how to calculate ROIC and WACC from the financial statements. 📖 How ROIC and growth create value from Thomas Chua (Steady Compounding). 🎥 YouTube lecture from Aswath Damodaran showing how to calculate the cost of capital or WACC. 📖 Warren Buffett's three categories of ROIC. 🧵 Breakdown of how to think about ROIC from a CFO 🔍Question of the Week
📖Knowledge Tidbits
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Unlock the mysteries of the stock market with us! We break down complex topics into simple, easy-to-understand language. Join over 21,000 readers, including professionals from Visa, Wells Fargo, and Moody's, who receive our insights every Tuesday.
Hey Reader,Did you know Warren Buffett considers his investment in Berkshire Hathaway his greatest investment mistake? It's true, he has said many times over the years it was his biggest mistake. In today's issue: How to avoid investing mistakes. Buffett's thoughts on a DCF. How to intrepret drawdowns and recoveries. Much more.... 💸Sponsored by: Finchat.io Analyzing companies is tough. But having the right tools can make it that much easier. That's why Andrew and I's #1 recommended stock...
Hey Reader, Did you know that while working as a caddy during his sophomore year at Boston College, Peter Lynch used his savings to buy 100 shares of Flying Tiger Airlines at $8 per share. The stock later rose to $80 per share, and the profits helped pay for his education. In today's issue: Peter Lynch teaches beginners how to invest. How to build an investment process. What could disrupt Google and the internet? Much more...... 💸Sponsored by: Help The IFB Podcast team by filling out our...
Hey Reader,Did you know Charlie Munger coined the term “lollapalooza effect” to describe how multiple factors—like a strong brand, pricing power, and customer loyalty—can combine to create extraordinary value in a company. He often uses this to explain why some companies (Costco) are worth far more than their competitors. In today's issue: Slides from the goat of valuation, Aswath Damodaran Michael Mauboussin breaking down a DCF Joel Greenblatt's Columbia Class lecture notes Much more..........