Is there some stock screen out in the free internet areas / free internet domains that I can use to screen stock on

(a) Cash Return on Invested Capital?
(b) Net worth / Market capitalization
(c) Revenue growth / Revenue change over 5 years / 10 years….. and …..
(c) total Market cap – to weed out very small cases
(d) industry – to have some sort of a diversification

etc..

I’m looking at companies from USA so US screeners are good for me

regards

Subu

kfh: Not sure about BAC and Buffett specifically for the reason you mentioned – it’s hard to tell what Buffett bought and what was purchased by managers in his subsidiary companies. Personally, I think this $4 billion CFC acquisition is downright stupid so I wouldn’t go near BAC for at least a while longer.

SS: Check out the questions Josh and Ed had, and my response to them. If that doesn’t answer it, send me an email.

First, congrats to your site, I discovered it yesterday and already love it.

Regarding your $100 example above:

I can follow the 5% annual inflation example where $100 in 5 years are worth $77.38 today.

However for the 15% annual inflation (or 5% inflation, 10% return) example I get a different result from Excel. I got $44.37 instead 48.05.

Not sure whether I’m missing something.

Cheers,

SS

Thoughts anyone?

Buffett has owned WFC for a long time and also owns BAC

I also hold both(my only US banks but not because of Buffett but my own research)

Any insight in to why Buffett holds them? Belief in management and/or brand? Both are vulnerable to the mortgage mess.

My reasoning has been that banks are cash machines, even poor ones can make money(Buffett’s quote about even an idiot can run them). Subprime will end someday and the cash machine will start paying off again.

The intricacies, however, makes the game all the more interesting….good investing everyone.

Ed & David: Two sides, same coin (in my opinion).

1. He wears size 60 jeans. No need to know his exact weight, or
2. He’s 450 pounds. No need to see him to know these size 32 jeans won’t fit.

Josh & Ed: The formula I used was the FV (future value) formula in Excel:

=FV(-5%,5,0,-100)

Your formula calculates: How much do I need to invest today at 5% growth to end up with a final amount of $100. We need to know: How much will $100 be worth if it falls at 5%. These are two different questions.

Think of it in terms of gaining vs. losing 5% a year on an investment. After 5 years, $1000 would grow to $1,276 – a gain of $276 – or fall to $774 – a loss of $226. Both changed 5% a year, but the dollar amounts were different.

Try this: =NPV(-5%,0,0,0,0,77.38). You’ll end up with $100 – the present value of $77.38 five years from now, assuming a 5% drop each year.

(Ed, five years from now, I hope to be right here. ☺)

BlahBlah: I don’t shun banks, I’m just not willing to put money in at seemingly “attractive” levels because I don’t have confidence in my assessment of “attractive”. That said, if I were to see something silly going on, I’d consider an investment.

The sub-prime mess is real, and I can’t judge how deeply it will affect the banks so I don’t feel good right now. Back in the 1960s when American Express got crushed for losing money on salad oil/sea water, I would have considered buying because it wasn’t a fundamental business problem.

Are Citi’s problems fundamental to their business as a bank and to what extent? I don’t know exactly, so I can’t feel good. But, if the stock was getting kicked in the teeth because they misplaced $4 billion of sea water, I’d be all over it.

Mark: When buying businesses, you need to factor in inflation to the extent that the following can be answered: Can this business raise prices to match or beat inflation? Inflation is not a concern to Coca-Cola because it can do just that. It is, however, a concern to Fortress Investments (FIG) – a company that relies on (a) aggregating new assets and (b) growing existing assets, because revenues are/seem to be directly tied to the performance and breadth of the assets managed. FIG’s industry hovers around charging 1% or so of assets managed and, no matter how bad inflation gets, that fee can’t really go much above, say, 2% or investors will leave for “cheaper” funds.

In the asset management business, it is all about performance and fees. Investors are rarely loyal (in mutual funds), competition is fierce, and pricing is generally fixed. As such, inflation can be a concern.

That’s why I like to just stay away from such difficult problems.

Art: There are some Excel spreadsheets floating around the net and on some of the posts on this site, but they should only be used as preliminary screeners. Each company requires a thorough analysis, one that can not be performed by Excel. Check out some of the past posts (I know there’s one for the Johnson & Johnson post).

I come up with the same numbers as Josh for the NPV calculations.

What do you think are the odds of me finding you in 5 years?

EAM

I don’t do this full-time and lean on excel to help crunch financials efficiently. I’d like to be sure I’m doing this the right way and would appreciate an example. Do you have an excel template for your stock analysis method? I’ve created one following “The New Buffetology” book and workbook, but the books don’t have exact formulas for each of the 12 financial calculations. I suspect that’s because the writer recommends a less mechanical analysis method, but time is an issue for me. If I have to use a mechanical method I’d at least like to be using the correct formulas.