The Earnings Quality Score (EQ Score) is an objective measure developed by Wolfe Research (in their 10-K Navigation Guide (2020)) that helps investors identify potentially underperforming stocks. The model assumes that balance sheet and cash flow statements show early signs of income statement problems, and that management teams...
Imagine turning $10,000 into $1 million through a single investment. This is what investors call "100-baggers," stocks that return $100 for every $1 invested. Thomas Phelps’ 1972 book "100 to 1 in the Stock Market" identified 365 such stocks from 1932 to 1971, and Chris Mayer’s 2015 "100...
$5 trillion was wiped out in the U.S. markets in the two days following Trump's "Liberation Day" tariffs. Howard Marks, co-founder and co-chairman of Oaktree Capital Management (the world’s largest distressed debt investor), recently described the situation as “the biggest change in the environment that I’ve probably seen...
If you're researching and investing in individual stocks on the stock market, you should run a concentrated portfolio to outperform the overall market. This may be contrary to what's taught by most financial advisors, but the reality is that a handful of exceptional businesses drive the overwhelming majority...
Many investors avoid quality businesses that have already doubled or tripled, assuming they've missed the opportunity. The contrarian reality is that these moves often signal the beginning of a compounding story, not the end. Outsized returns come from identifying businesses that can grow revenue and free cash flow...
In his 1989 book "One Up On Wall Street," Peter Lynch argues that everyday investors can outperform Wall Street “experts” by leveraging their real-world observations and freedom from institutional constraints. This post covers why individual investors have advantages over professionals when investing in stocks, and shares Lynch's methods...
In a previous post, we introduced the concept of 100-baggers—stocks that return $100 for every $1 invested. We also discussed the coffee-can portfolio strategy for holding these exceptional investments through market cycles. These concepts draw from Thomas Phelps' 1972 book "100 to 1 in the Stock Market" and...
As of December 2024, there are ~53,626 publicly traded companies worldwide. With so many options, how do you find stocks worth your money? This post draws from Michael Shearn’s 2011 “The Investment Checklist: The Art of In-Depth Research” to explain how to systematically find great investment ideas -...
Investors are naturally drawn to companies that are growing rapidly, hoping for exceptional returns as these businesses expand. However, to determine if a company's growth will create long-term value, you need to understand these key principles: In this post, we'll discuss these principles drawing from Michael Shearn’s 2011...