How could Warren Buffet evaluate a stock in 1 minute to have a brief but solid idea?
Subject : How could Warren Buffet evaluate a stock in 1 minute to have a brief but solid idea?
Generally speaking,
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During Peaceful, Bullish Economy and Market :
PE < ROIC , is considered Undervalued
PE > ROIC , is considered Overvalued
.
During Unpeaceful, Bearish Economy and Market,
PE < ROA , is considered Undervalued
PE > ROA , is considered Overvalued
.
Regardless of the time, there always happens mispricing opportunities where some stocks go Extremely Undervalued, the contrarians will not let go of these Extreme Contrarian Opportunities.
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How could Warren Buffet evaluate a stock in 1 minute to have a brief but solid idea?
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He looks for high digits of ROA and ROIC :
— compared them to 10Y Government Bond Yield to conclude quality of profitability & company value constructiveness.
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— compared them to P/E to conclude for undervalueness, pay less for more valuable, by :
P/E÷ROIC Weight Ratio
&
P/E÷ROA Weight Ratio
