Your Relationship Has an ROI, and Most People Refuse to Calculate It You track the return on your savings account, your retirement portfolio, and probably even your gym membership. Yet the single largest investment of your life, the person you share your time, money, and future with, somehow escapes any honest accounting. That is a […]
The Question That Crypto Broke There is a question that value investors ask before they buy anything, and it is the oldest question in finance. What is this thing actually worth? Not what someone will pay for it tomorrow, not what the chart suggests, not what the crowd is chanting. What is the underlying business
How to Think About the Intrinsic Value of Crypto When There Are No Earnings to Discount Read More »
There is a story Wall Street loves to tell itself. It goes something like this: the best companies own nothing, control everything, and let someone else deal with the messy, expensive, physical reality of actually making things. Asset light is the aspiration. Capital efficiency is the religion. And the return on invested capital of a
The Asset Light Trap: Why “Lean” Companies Can be the Most Fragile Read More »
Every company loves to announce big spending. New factories, new technology platforms, new distribution centers. The press releases practically write themselves. “We are investing in our future,” the CEO declares, standing in front of a rendering that looks suspiciously like every other corporate rendering you have ever seen. But here is the question that almost
The ROIC Engine: How to Tell if New Spending is Actually Creating Value Read More »
Most investors treat a low Price to Free Cash Flow ratio the way a shopper treats a clearance rack. Something is cheap, so it must be a deal. The logic feels airtight. You are paying less for every dollar of cash the business generates. What could go wrong? Quite a lot, actually. The P/FCF ratio
In 1956, a physicist at Bell Labs named John Larry Kelly Jr. published a paper that had nothing to do with Wall Street. He was thinking about noise on telephone lines. About how much information you could squeeze through a signal before static ate it alive. The paper was dense, technical, and aimed squarely at
Is This the Most Dangerous Formula in Finance? (Kelly Criterion) Read More »
Most investors check their portfolio the way someone checks their weight after a vacation. They look at one number. They feel something. They move on. That number is total return. And it is, without exaggeration, one of the least useful figures in all of investing. Total return tells you where you ended up. It says
Sharpe vs. Sortino: The Two Numbers That Matter More Than Your Total Return Read More »
There is a seductive simplicity to the phrase “European stocks are cheap.” It shows up outlook, every quarterly letter from asset managers trying to sound contrarian, and every financial headline that needs a hook. The pitch goes something like this: European equities trade at a discount to their American counterparts, therefore they represent value, therefore
There is a peculiar ritual in earnings season. A company announces record revenue. The stock drops eight percent. Analysts scramble. Commentators look confused. Retail investors feel betrayed. But the market is not broken. It is doing exactly what it is supposed to do. It is telling you something that the headline number never will: that
How Revenue Growth Can Destroy Shareholder Value Read More »
Why Cheap Stocks Keep Tricking Smart Investors There is a particular thrill that comes with finding a stock trading at 8 times earnings. It feels like walking into a luxury store and discovering a mispriced jacket on the clearance rack. Your pulse quickens, your internal monologue starts whispering things like “the market is sleeping on