A key component in the economic profit models I ran for Starbucks is the assumption that Starbucks will maintain a growth rate of 9% over the next 5-10 years. A common estimate I’ve seen in other research pieces. The question… Read More
[edit]: My original economic profit model had an error. It was overestimating future invested capital. I kept the original images of each economic profit model but added updated values below them. This also changes my conclusion about Starbucks being overvalued… Read More
How would you rate this quote? “You have to be confident as you face the world each day, but you can’t be too cocky. Anyone who thinks he’s going to win them all is going to wind up a huge… Read More
We have a cognitive quirk. We have a bunch but let’s focus on one. When faced with a hard or complex problem instead of answering it we swap it for an easier question to answer. We believe we have answered… Read More
Blockbuster dominated the movie rental business. It had stores all over the U.S. Renting movies was a good business with good margins. The big drawback was when the movies were not returned on time. With a DVD sitting in someone’s… Read More
The irony of this post is not lost on us. An active manager excited about another active manager moving more towards factor and algorithmic based investing. On Tuesday, BlackRock laid out an ambitious plan to consolidate a large number of… Read More
Morningstar making the case for a long-term investment in Railroad stocks. One of the big reasons is taxes. The railroad stocks are not multinationals. They only operate in the U.S. and they pay the U.S. corporate tax rate. UNP Effective… Read More
Each position in your portfolio has a target weight, or ideal position size based on initial purchase. Around a position’s target weight we also assign a minimum and maximum tolerance band. Since positions are in constant fluctuation, the tolerance bands… Read More
With the new year we’re going to make our annual prediction about the U.S equity markets. But first we want to revisit some of the more memorable market predictions of 2016. “Sell Everything”- Andrew Roberts, RBS Strategist On January 11,… Read More
One my favorite new podcasts is the BBC’s 50 Things That Made the Modern Economy. Each episode is about 10 minutes long but packed with information. The latest episode discusses the greatest selling product in the history of the world… Read More
Intuit’s QuickBooks Online is its Software As A Service (SAAS) business. It is replacing Intuit’s legacy QuickBooks Desktop software. QuickBooks Online is part of