Most investors read a 10-K the way tourists read a museum plaque. They glance at the headline number, nod politely, and move on to the next exhibit. Credit analysts do something different. They read the 10-K the way a detective reads a crime scene. Every number is a witness. Every footnote is a potential alibi. […]
How to Read a 10-K Like a Credit Analyst (Debt to Equity Ratio) Read More »
There is a peculiar habit in finance where people confuse complexity with rigor. Build a bigger model, add more assumptions, stretch the forecast further into the future, and somehow the answer is supposed to be more trustworthy. The Discounted Cash Flow model sits at the center of this belief. It is taught in every business
There is a number that investors love to throw around at dinner parties. Price to book. P/B ratio. It sounds clean. It sounds rational. You take what the market says a company is worth, divide it by what the accountants say it owns, and out comes a verdict. Cheap or expensive. Buy or pass. Except
Asset Light vs. Asset Heavy: A Tale of Two P/B Ratios 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 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 »
Most people see a price to earnings ratio of 100 and assume someone has lost their mind. A hundred years of earnings baked into a single share price. It sounds absurd. It sounds like the kind of math that only works if you close one eye and squint with the other. But here is the