Perfect Opportunity Cost Introduced This article strives to accomplish what many have tried – coin and define a new economic definition, Perfect Opportunity Cost. The definition is derived from two well-known economic concepts, opportunity cost, and perfect competition, defined below: …
“The appropriate multiple for a business compared to the S&P 500 depends on its return on equity and return on incremental invested capital. I wouldn’t look at a single valuation metric like relative P/E ratio. I don’t think price-to-earnings, price-to-book…
A dollar earned from a horseshoe company is the same as a dollar earned from a hospital. Strip everything away from a business, its economic characteristics, its people. Cash in and cash out is all you are left with as…
You have likely heard the phrase “more risk, more reward”. But, this is the wrong way to think about an investment or capital allocation decision. The financial definition of risk should be: The probability of loss X amount of possible…