Rule number 7 would price you out of 85% of the market. I have my own rule and thats never pay more than 10Y average PE. In other words my rule number & is never pay above blue line in Fastgraphs. That way I can own stocks like Pepsi and still make double digit returns. Or companies like ADP, LVMH, Google and so on.
Hi Chuck, great video! Does FastGraphs automatically adjust to the current average yield of high grade corporate bonds or is the 1962 value (4.4) used?
After seeing the many, many companies you have plotted on your FASTgraphs, it appears you end up profitable if you bought when the price was below 15PE (13PE in few cases) period. Even better when the downtrend flattened or reversed. A quick scan of debt levels (coverage ratio), gross margins, free cash flows, and ROIC should add to the confidence investing in it. Of course, this assumes their future earnings is not in jeopardy. To simplified?
No not to simplified, it is that simple. However, your last sentence requires comprehensive research and due diligence that our tool helps you conduct efficiently. More importantly, there is no substitute for doing your research. Regards, Chuck
Let me put it this way, the real estate is worth significantly more than the total enterprise value of the common stock. But more to the point, MPW was never a buy, it was a speculation and that hasn't changed. If you got the stomach, go for it, if not invest in something more solid and less speculative. Regards, Chuck
I hope people got out of MPW before Steward hit the fan. I bailed a year ago with a small gain. I don't follow Carnevale, but I hope he told you guys to see this dog.
