ROIC and the Investment Process
Michael Mauboussin and Dan Callahan, CFA (Morgan Stanley)
Return on invested capital (ROIC) is one way to measure spending money (invested capital) and making money (net operating profit after taxes). ROIC, in turn, informs us about the value of a business, which is the present value of future free cash flows.
Whiskey and Oranges (and Coinbase)
Marc Rubinstein (Net Interest)
Are Cryptos securities as the SEC is claiming? There may be answers to this in the Howey case from 1946.
Aptus Musings: Economic Cycles
David Wagner (Aptus Capital Advisors)
The majority of equity returns have occurred in the early cycle phase of economic recovery, with modest gains in mid-cycles, and materially negative returns in late cycles.
Value Investor Insight
Old West Investment Management
Profile of the Old West portfolio management team in Value Investor Insight.
The Importance of Working Capital
Dean Pernas (Pernas Research)
Aside from being a measure of a company’s liquidity and financial health, working capital is a window into the efficiency of a company and may also serve as a signal of competitive advantages.
Growth is not the same as “growth”
Joachim Klement (Klement on Investing)
Unlike value investing, where there are differences in how to measure ‘value’ but there is at least a commonly accepted definition of what ‘value’ is, there is no such common definition of what the word ‘growth’ in growth investing means.
Master Series: David Rolfe
Investment Master Class
Warren Buffett has long likened compounding to a snowball of sticky snow, and the longer the runway the snowball has to gather that sticky snow, the better. One manager that started rolling that ball a quarter of a century ago, was David Rolfe of Wedgewood Partners.
Video: What Drives High Dividend Growth
Gregory Powell (Miller/Howard Investments)
A key difference between bonds and stocks is that bond income is fixed while stock dividends can change over time. The good news is that dividend increases are common and much more frequent than decreases.
Exponential Compounding Methods
Alex Barrow (Macro Ops)
Long-term compounders are the stocks that can create generational wealth – if held on to. The problem is that they can be difficult to identify.
Do High Interest Rates Fix High Inflation?
Lyn Alden
Examines under what contexts raising or lowering interest rates can quell or exacerbate money creation and price inflation.
Youtube: Electric Vehicles: Art Berman, Pedro Prieto, Simon Michaux
A discussion on the viability of scaling electric vehicles and what role they could play in the future. Electric vehicles have become increasingly more popular in recent years, and in tandem more polarizing and controversial.
Capital Allocation
Credit Suisse
An older paper on how to evaluate a company’s capital allocation decision. We include here because this topic is as relavent as ever.
Dividends matter, growing dividends matters more
Joachim Klement (Klement on Investing)
Dividend payments have become an implicit bond between companies and investors. Investors are less likely to sell your stock in a tough environment as long as the dividend is not cut.
Learning from Dollar Tree’s Macon Brock
Investment Master Class
An insider’s account of how Dollar Tree remade American retail.
Good (Bad) Banks, Good (Bad) Investments: An Investing Perspective
Aswath Damodaran
While differentiating between good and bad banks can be straightforward, it does not follow that buying good banks and selling bad banks is a good investment strategy.