…my apologies if some may feel this post is off topic for this board, as it doesn’t include any company specific information…
…however, I believe it’s spot on with regard to specific stocks Saul et al. have discovered here…
…this article, Jun 30, 2020 by Morgan Housel, identifies the parallels between the chances of a species for evolutionary survival, and business survival, and how the metrics for corporate valuation are ever changing, hence the “Keep Running” title…
You’d think a new species discovering its niche would be fragile and susceptible to extinction – let’s say a 10% chance of extinction in a given period – while an old species had proven its might, and has, say, a 0.01% chance of extinction.
But when Van Valen plotted extinctions by a species’ age, it looked more like a straight line.
Some species survived a long time. But among groups of species, the probability of extinction was roughly the same whether it was 10,000 years old or 10 million years old.
…snip…
There are 32 million businesses in the United States. The Bureau of Labor Statistics tracks how many of them die each year, and how old they were at death.
Dig through the numbers and one thing’s clear: there is no age at which business gets easy.
…snip…
In his book Investing, Robert Hagstrom wrote about strategies that once worked but eventually withered:
In the 1930s and 1940s, the discount-to-hard-book-value strategy was dominant. After World War II and into the 1950s, the second major strategy that dominated finance was the dividend model. By the 1960s investors exchanged stocks paying high dividends for companies expected to grow earnings. By the 1980s a fourth strategy took over. Investors began to favor cash-flow models over earnings models. Today it appears that a fifth strategy is emerging: cash return on invested capital.
…enjoy…