There is a number that Wall Street loves to celebrate. Return on equity. It shows up in screeners, gets highlighted in earnings presentations, and makes executives look like geniuses. A company posts 25% ROE and suddenly it is a “compounder.” A “quality business.” A “must own.” But here is the thing nobody talks about at […]
There is a particular kind of pain that only dedicated investors know. It is the dull ache of spending four hours reading everything you can find about a stock you already bought, not to challenge your thesis, but to feel better about it. You are not researching. You are building a shrine. And every bullish
Researching Until it Hurts: The Masochism of Confirmation Bias Read More »
Every generation of investors falls in love with a new metric. In the 1990s it was earnings per share. In the 2000s it was EBITDA. In the 2010s it was revenue growth. Each one had its moment in the spotlight, and each one eventually revealed itself to be an unreliable narrator. Not because the numbers
There is a strange magic trick hiding in the tax code. It is not illegal. It is not even obscure. But most people walk right past it because it is dressed in the most boring costume imaginable: depreciation. The word itself is enough to make your eyes glaze over. It sounds like something an accountant
How Depreciation Can Turn a 30% Tax Bracket into 0% Read More »
There is a particular kind of frustration that value investors know well. You pull up the financials of Hermès or Ferrari, you see the price to earnings ratio, and you close the tab. Forty times earnings. Fifty. Sometimes more. The numbers look like a typo. Surely the market has lost its mind. Surely this will
The P/E of Luxury: Why Hermès and Ferrari Never Look “Cheap” Read More »
Why the Simplest Line on a Chart Might Be the Most Truthful Thing in Finance There is a line on almost every stock chart that nobody wants to talk about when things are going well. It sits there quietly, moving with the patience of geological time while prices dart around it like nervous birds. It
The Brutal Honesty of the 200 Day Moving Average Read More »
There is a particular magic trick in finance that hides in plain sight. It involves no sleight of hand, no back room dealings, and no regulatory violations. It sits right there in the quarterly earnings reports of Business Development Companies, printed in clean black ink, fully disclosed. And yet most investors walk right past it
PIK Income: The Hidden Accounting Trap in Your Favorite BDC Read More »
On Market Making, Beautiful Models, and the Mess of Reality There is a particular kind of confidence that comes from solving equations on a whiteboard. It is clean. It is elegant. The variables behave themselves. The assumptions hold. And then someone walks onto a trading floor, tries to apply what they learned, and watches reality
The Ivory Tower vs. The Trading Floor: Why Theory Fails in Practice Read More »
Why Do Analysts Always Beat Earnings Estimates? The Pattern Nobody Questions Every quarter, hundreds of public companies report their earnings, and a remarkable thing happens with almost mechanical regularity: most of them beat the analyst estimates. Year after year, roughly 70 to 80 percent of companies in the S&P 500 report earnings that come in