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28 de Dic. de 2021 14:27

Pretax EPS 10X 

JP Morgan Chase & Co.NYSE

Descripción

A very rudimentary version of Warren Buffett's 10X Pretax Rule:

How it works:
I took the Financial data provided on the platform; Annual 'Pretax Income' divided by the Annual 'Total Common Shares Outstanding', then multiply by 10.

Reason:
There are many annual reports to suggest that when Warren Buffet buys large quantities of stocks, they are bought at a price under the 10X Pretax EPS and sold when its above.

Risk:
There are obviously many different reasons why Warren Buffett buys a stock, so buying every stock under the 10X Pretax EPS DOES NOT guarantee future gain. This is intended as a helpful insight AMONGST many to identify good entry levels.

Uses:
This works well with long established high quality companies but not so much with new growth momentum companies due to negative earnings.
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