Earnings Growth Rate = Shareholder Return Rate



Earnings Growth Rate = Shareholder Return Rate This week’s blog is focused on elaborating on the dynamics between earnings and stock price. Today’s blog looks at velocity, or what I call the rate of change. In the long run, shareholder returns are driven by the returns the business they own generates. Not the stock market, […]

Buffett’s All In!



 Warren Buffett says that his purchase of Burlington Northern is an “all-in-wager” on the United States. The theme of this blog is “Successful Investing Requires Optimism Built Upon Sound Fundamentals.” Warren is optimistic about our long-term future. Today’s video looks at whether or not he is basing his faith on sound fundamentals. Best when viewed in […]

Earnings Determine Stock Price



This week’s blog is dedicated to illustrating the undeniable long-term relationship between earnings and market price. Valuation plays an important role. However, over time, the importance of earnings is clear. In the short run, volatility will always be evident. Prices may not perfectly correlate to earnings over short periods. Eventually though they will. Knowing this […]

Google Growing & Growing!



I define high growth stocks as companies growing earnings at 15% or faster. Shareholder returns will closely correlate to the rate of change of earnings growth a company achieves as long as valuation is in line. If valuation is high, returns will be lower than growth. If valuation is low, returns will be higher than […]

How Sweet is It?



Today’s blog looks at a well-known, but average growing company – Hershey. Once again, we see the strong relationship between the rate of change of earnings and shareholder returns. Today’s video looks at Hershey based on fundamentals. Best when viewed in full youtube screen. When you pay attention to fundamentals, you can develop an enlightened […]

Investment or Speculation



I believe that in its truest sense, investing is based on fundamental values. Earnings and cash flows are the ultimate determinant of True Worth™ or fundamental value. So how do you deal with young companies that have promise, but no earnings? If you really like the business, you speculate. The key point is that you […]

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