David Trainer Explains How to Bypass the Risk-Reward Tradeoff
CEO David Trainer discusses how to manage risk to obtain high returns based on low market expectations.
Barron’s Says New Constructs Provides The Best Accounting Analysis
Barron’s featured New Constructs for the eighth time this past weekend.
Munger on Accountants: “Utterly failed us…and no sign of reversal of the failure”
The reason we focus on Economic Earnings as opposed to Accounting Earnings is because Accounting Earnings are subject to too much manipulation – as Charlie Munger states below. This problem is not going away anytime soon.
Stock Pick of the Week: Buy International Business Machines (IBM)
HIDDEN GEM: Our detailed valuation model shows that IBM grew its “economic” profits more than it accounting profits during its last fiscal year. Economic profits rose by $1.15bn while accounting profits rose by $1.09bn.
Finance 101
Finance is the process for making accounting data useful.
Per Accounting 101: accounting data by itself is not useful. Think of accounting data as the words used in the language of Finance. Just as with any language, words can be arranged to convey almost any meaning.