Posts Tagged: growth

Will You Be a Gambler or the House In the Stock Market?

Blackjack odds are as good as you’ll get at most casinos. In most cases, the casino has just a 1% edge versus the gambler. So in a given night, you can go on a great run and win a lot of money playing blackjack. But of course if you played every day, all day, your…

Stocks That Triple In One Year

There have been 1,700 individual U.S. stocks (with starting market caps of at least $200MM, inflation adjusted) which have tripled in a 12-month period since 1962. Many of these individual stocks tripled in more than one 12-month period, so we have 7,500 or so separate observations of a stock tripling in a 12-month period. Tripling your money quickly…

The Persistence of Growth

It is unlikely that the fastest growing companies from the past five years—think Tesla, Apple, and Under Armor which have grown sales 32x, 4x, and 4x respectively since 2010—will continue to be the fastest growing companies over the next five years. Some high growth stocks will continue their torrent growth, but future growth rates have…

Fun with F.A.N.G.

Growth stocks have killed value stocks lately, led in large part by four stocks. Let’s make the following arbitrary assumptions in order to have fun with the group of stocks know as F.A.N.G. (Facebook, Amazon, Netflix, and Google). Let’s assume: That each company’s market cap grows by 7% per year for the next 10 years (roughly…

Return on Equity Explored

Non-financial firms are earning an impressive return on their collective equity value. As of April 30th, the U.S. markets return on equity was nearly 18%, well above the long term average of 14% for non-financial firms. Obviously, corporations like earning impressive returns on their equity. So what is driving today’s elevated rates, and what trends…

Lessons from Market Extremes

We know that markets overdo it at extremes. At the market level, we call these bubbles or manias, panics or crashes. At the stock level, we call them glamour and value. Let’s collect some lessons from the best performing stocks from the two categories where investors have the most extreme (good or bad) expectations for…