Invest Like a Guru by Charlie Tian
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The first symptom to look for when selecting stocks is… A histogram provided in 2016 in the United States shows the distribution of 12-month operational margins for 3577 organizations. The existence of high operational margins, especially over a long period, is essential (but not a sufficient condition), to confirm competitive superiority. In the micro-economics realm,…
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ROIC (Return on Invested Capital) is the most effective metric for evaluating a company’s competitiveness and for selecting investments. Business is such that high-profit margins are not necessarily a sufficient condition for evaluating an organization’s competitiveness. It is possible for the quality of asset utilization to be very low, and high operational profit margins only…
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Why Should We Avoid Investing in “Cyclicals” (As Peter Lynch Calls Them) and How to Identify Such Companies? The graph below presents two companies. As you can see, the earnings volatility of DOW is very high due to recessions, compared to the parameters of CVS. The cyclicality of a company or industry is determined by…