Financial economics vs accounting = NPV vs gross profit, an example:
Management communication of positive NPV project and gains for existing vs new shareholders:
Feb 5, 2019 • 5 tweets • 2 min read
Reported ROE using actual U.S. inflation for a 6% “real” IRR project:
Return on Invested Capital – Issues:
Jan 18, 2019 • 11 tweets • 4 min read
Summary of Results of Questionaire/Survey of Investment Professionals’ and
Academics’ Opinions on Academic Research on Fundamental Analysis and
Equity Market Anomalies citeseerx.ist.psu.edu/viewdoc/downlo…
Q1: Which risk model is most appropriate for risk calibration of an equity
trading strategy?
Oct 19, 2018 • 12 tweets • 3 min read
Are Cash Flows Better Stock Return Predictors Than Profits?
"GAAP permit too many types of financial statement presentations;
information is too aggregated and inconsistently presented,
difficult for users to understand the relationship between how accounting information is presented and the underlying economic results of the company."
Oct 17, 2018 • 15 tweets • 4 min read
Facts about Formulaic Value Investing:
"First, there is little compelling evidence that these strategies deliver superior investment performance for US equities. Second, instead of identifying undervalued securities, these strategies systematically identify companies with temporarily inflated accounting numbers."
Oct 2, 2018 • 4 tweets • 2 min read
"So, how much is a perfect earnings prediction model worth to you? Surprisingly, a lot less than you might expect. Would you believe nil, as the evidence we present in this article shows?" cfapubs.org/doi/pdf/10.246…
"gains from a 3-month investment, starting 60d before q-end and ending 30d after q-end (to include the q’s E release), in the companies that exactly met or beat analysts’ consensus E estimates—as well as the gains from shorting the cos that subsequently missed the consensus."
Feb 21, 2018 • 11 tweets • 3 min read
EBITDA’s dominance over EBITA in explaining valuations has been declining over time, while the performance difference between EBITA and EBIT has been increasing. ssrn.com/abstract=29996…
"In terms of ability to predict stock returns, it appears that a structural change has occurred after the financial crisis, as the three operating income measures have failed to consistently predict stock returns over the last seven years."
Jan 20, 2018 • 28 tweets • 8 min read
Thread: Commercial Due Diligence:
A Commercial Due Diligence programme should be set up to:
Jan 10, 2018 • 13 tweets • 3 min read
Thread: Industry ROA Trees from Operations Forensics:
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