Most people completely overlook Canadian equities. Screening the Venture exchange for EV/EBIT or EV/EBITDA will give you fantastic business's. There are 4600 tradable securities in Canada, I find it hard to go directly to the states for wonderful business's. The Venture exchange is known as a gold mine in the small/micro-cap space, with good reason.
Intéressant. Je suis au début de mon parcours d'investisseur, j'ai toujours tendance à préférer de plus grosses valeurs mais j'assume que c'est pas la meilleure approche.
Fantastic videos and site! Constructive criticism re: this video. The book recommends rebalancing each year into top 30 cheapest stocks. By not doing so you are implementing a buy and hold strategy. Any value strategy can by definition never be buy and hold. So you unfortunately you haven’t backtested this strategy at all. Keep up the good work, this is an amazing channel.
It’s not a buy and hold strategy though no? You’d be selling winners once their Acq M mean reverts so over 5 years you may have found winners that then fizzled out
That strange result. AM basically P/E ratio with (cash & debt) into consideration. AM below 5 usually also mean low P/E ratio with low debt. We know that low P/E ratio company usually perform good. I think you may miss something here.
Great analysis of the book. I've read it and currently have an ongoing "study" using the formula on Wall Street Survivor paper money portfolios (I have one for Magic Formula too). Been over a year and it has done well, but we will see over time. I feel like the most value comes from using the list as a screen for ideas. Thank you for covering this!
Enjoying your Tickernomics site quite a bit. After exporting the Acquirer's Multiple spreadsheet to excel, did you manually run the summary performance analytics (Total Return CAGR, Winners/Losers, etc.) manually or should I be looking somewhere else? Let me know if I am missing something. Would be helpful to have the performance analytics in the excel sheet or on the Tickernomics site if not currently available!
Glad to hear it! And you are correct I did some additional analysis in excel based on the exported data from the Tickernomics script. It could probably have also been done with scripting but I thought excel was better for visuals
I’d be interested to see the results if you removed biotech companies as they can have a negative EV but are not cash flow positive and often burning cash quickly. Also back out any countries that don’t have high accounting standards (i.e. China)
Your script and the results you presented are misleading. The point of the Acquirers multiple is to assess the cost to buy out the entire company while also thinking about mean reversion which takes time. Addtionally, it is stated in the book that you increase your odds if you choose companies that have low AQ multiples but are also discounted based on traditional valuation methods such as earnings and FCF. If you choose stocks with a low AQ multiple and have a nice margin of safety, then it is only a matter of time till you outperform the market by a wide margin.
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Good job. Your videos are getting better and better.
A lot of effort went into this video. Nicely done and interesting, have my Subscription!
Most people completely overlook Canadian equities. Screening the Venture exchange for EV/EBIT or EV/EBITDA will give you fantastic business's. There are 4600 tradable securities in Canada, I find it hard to go directly to the states for wonderful business's. The Venture exchange is known as a gold mine in the small/micro-cap space, with good reason.
Intéressant. Je suis au début de mon parcours d'investisseur, j'ai toujours tendance à préférer de plus grosses valeurs mais j'assume que c'est pas la meilleure approche.
this channel is a gold mine
Fantastic videos and site! Constructive criticism re: this video. The book recommends rebalancing each year into top 30 cheapest stocks. By not doing so you are implementing a buy and hold strategy. Any value strategy can by definition never be buy and hold. So you unfortunately you haven’t backtested this strategy at all.
Keep up the good work, this is an amazing channel.
Thanks! I'll check it out. Best from Germany 😉
In the book, didn't the backtest be similar to magic formula where they only held a name for a year and rotated in New names each quarter?
I believe it followed the same logic. Though I didn't read too deeply into the fine print
Great channel looking forward to more videos
I thought the AM requires rebalancing every year, if so this doesn't backtest the suggested approach?
Can you do one where you sell them after 1 year, and buy new ones, like the author of the method recommended? :)
Can you look at the Silicon Motion (SIMO) merger arbitrage?
So would you recomendet invest in these kind of stocks? Or s&p500 is just better?
I think the logic is similar to Magic Formula. Both holds 1 year only; should focus on US businesses only; should root out cyclical stocks.
Could you do a video on Net Nets and if you consider it a good place for investors with a lower net worth?
Already did one! th-cam.com/video/A-f68utiUfA/w-d-xo.html
Very cool website btw.
It’s not a buy and hold strategy though no? You’d be selling winners once their Acq M mean reverts so over 5 years you may have found winners that then fizzled out
I wanted to know how I get cheap stocks by the method. I'm from Brazil
That strange result. AM basically P/E ratio with (cash & debt) into consideration. AM below 5 usually also mean low P/E ratio with low debt. We know that low P/E ratio company usually perform good. I think you may miss something here.
Low PE doesn't always mean it'll perform well.
Eu queria saber como consigo ações baratas pelo método. Eu sou do Brasil
Great analysis of the book. I've read it and currently have an ongoing "study" using the formula on Wall Street Survivor paper money portfolios (I have one for Magic Formula too). Been over a year and it has done well, but we will see over time. I feel like the most value comes from using the list as a screen for ideas. Thank you for covering this!
What is Wall Street Survivor? Is it a book?
Enjoying your Tickernomics site quite a bit. After exporting the Acquirer's Multiple spreadsheet to excel, did you manually run the summary performance analytics (Total Return CAGR, Winners/Losers, etc.) manually or should I be looking somewhere else? Let me know if I am missing something. Would be helpful to have the performance analytics in the excel sheet or on the Tickernomics site if not currently available!
Glad to hear it! And you are correct I did some additional analysis in excel based on the exported data from the Tickernomics script. It could probably have also been done with scripting but I thought excel was better for visuals
Maybe try 25 years to hit a couple of recessions. There have been none in the past 5 or 10 years
I’d be interested to see the results if you removed biotech companies as they can have a negative EV but are not cash flow positive and often burning cash quickly. Also back out any countries that don’t have high accounting standards (i.e. China)
Also would interested if you left financials in or a percentage of them in.
Your script and the results you presented are misleading. The point of the Acquirers multiple is to assess the cost to buy out the entire company while also thinking about mean reversion which takes time. Addtionally, it is stated in the book that you increase your odds if you choose companies that have low AQ multiples but are also discounted based on traditional valuation methods such as earnings and FCF. If you choose stocks with a low AQ multiple and have a nice margin of safety, then it is only a matter of time till you outperform the market by a wide margin.
What if the AQ multiple is negative? Is -1x better than -500x
Obviously you need some marketing gimmick to sell books. It doesn't have to be true. Lol