Four of the most important ratios in investing: $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $.IXIC(.IXIC)$ $Invesco QQQ(QQQ)$ $NASDAQ 100(NDX)$ $.DJI(.DJI)$ $GLOBAL X DOW 30® COVERED CALL ETF(DJIA)$ 1. FCF / Invested capital2. FCF / Historic FCF3. FCF / Revenue4. FCF / Market capitalisationIf you had to add one, what would it be?High growth companies normally have high multiples.I created this table to show the relationship between growth and multiples👇In short, a PE ratio of 50 requires a 20%

High growth companies normally have high multiples.I created this table to show the relationship between growth and multiples👇In short, a PE ratio of 50 requires a 20% earnings growth over 5 years to turn that multiple from 50 -> 20.FYI, I use FCF yield - not P/E. $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $.IXIC(.IXIC)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ $.DJI(.DJI)$ $FT Vest U.S. Equity Deep Buffer ETF - January(DJAN)$ ImageTwo things you can do to become a better investor: 1. Limit th

Hope you're all having a great weekend.Here are the 10-year FCF/share growth rates of the 1,500 largest US companies. $Paylocity(PCTY)$ $Progress(PRGS)$ $Arista Networks(ANET)$ $Netflix(NFLX)$ $Installed Building(IBP)$ $Albany(AIN)$ $Four Corners Property(FCPT)$ $TopBuild(BLD)$ $Nexstar Broadcasting(NXST)$ $Lumentum(LITE)$ $Onto Inn

Here's how the constituents of the S&P 500 $.SPX(.SPX)$ differ based on their growth rate and the linearity of that growth.I invest in the top right, where growth is high and predictable.ImageWhen analysing a company, consider where its product/service fits in its customer’s income statement. I personally target essential spending, ideally related to OPEX and maintenance CAPEX.ImageTwo things you can do to become a better investor: 1. Limit the number of companies you own 2. Limit how frequently you trade This forces you to: 1. Only own your best ideas 2. Accept there will always opportunities you miss out on

Here’s a helpful mental model. When analysing a company, consider where its product/service fits in its customer’s income statement.I personally target essential spending, ideally related to OPEX and maintenance CAPEX.ImageThere are more essential software categories or only CybersecOffice software (eg Microsoft $Microsoft(MSFT)$ ), payroll (ADP $Automatic Data Processing Inc(ADP)$ ), accounting (Intuit $Intuit(INTU)$ ), work force management (ATOSS $Atossa Genetics(ATOS)$ ), enterprise (SAP $SAP SE(SAP)$ , Oracle $Oracle(ORCL)$).

What's the highest quality company with a network effect?Here's the list:- Revenue growth higher than FCF growth, suggesting that FCF margin has shrunk.- FCF/share growth not linear over recent years. Of course we expected that with their high CAPEX investments in recent years.- Low return on capital. Only 10% currently. ROC has been quite volatile.- Share count has increased by 5% over the last 5 years due to a 21% SBC/OFC ratio.Hope that helps. Not saying it's not a quality company, just reporting the ratios as I see and calculate them.I put through my list of network companies through my quality filter. $MasterCard(MA)$ rose to the top. $Adobe(ADBE)$ $Autodesk(ADSK)

Here's how the constituents of the $.SPX(.SPX)$ differ based on their growth rate and the linearity of that growth.ImageImagine being sat around a boardroom table listening to the world's top CEOs talking about the opportunities and threats facing their companies.My latest report covers the recent insights and the economic outlook from a range of quality growth companies...ImageIn 1960, Theodore Levitt warned that the decline of America’s railroad industry was because railroads assumed they were in the "railroad business rather than in the transportation business.” Companies miss out on long-term growth when they fail to see the full spectrum of its customer needs.

Portfolio at the end of December 2024December performance: -5.6% 2024 return: 20.5% FCF ROC = 38% FCF per share CAGR (5yr) = 24% FCF Linearity (5yr) = 0.94 FCF Margin = 35% FCF Margin Expansion (5yr) = 6% FCF Yield = 2.71%ImageWe exited our position in $Novo-Nordisk A/S(NVO)$ . The top contributor to performance was ATOSS Software. The top detractors from performance were $Fair Isaac(FICO)$ and $Applied Materials(AMAT)$ .I’ve held Novo for quite some time, mostly for the insulin side of the business - as I thought it was highly predictable. I think there will be a lot of growth once Ozempic is sold in Mexico.Well I personally own property and have cash savings, bu

Here's how the constituents of the $.SPX(.SPX)$ differ based on their growth rate and the linearity of that growth.I use RSq, so the closer to 1.00 the better the correlation and therefore the less the volatility. And yes, it's against years.ImageHere are some of the financial metrics I optimise my portfolio for:What would you add?ImageInterestingly I rarely see FCF yield as a predictor of future share price gains. But I absolutely keep my eye on it!The three most important qualities of a quality business:1. Predictable growth2. Capital efficiency3. Pricing powerWhat would you add?