Mexico Fund (Mexico Fund) Predictability Rank

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What is Mexico Fund Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Mexico Fund Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

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Mexico Fund (Mexico Fund) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Mexico Fund Inc (NYSE:MXF) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

6700 Alexander Bell Drive, Suite 200, Columbia, MD, USA, 21046

Website

https://www.themexicofund.com

Mexico Fund Inc is a United States based non-diversified, closed-end management investment company. Its investment objective is to seek long-term capital appreciation. The fund seeks to achieve its objective through investment in securities, primary in equity, listed on the Mexican Stock Exchange. Its portfolio of investment consists of investment in different sectors such as auto parts, airports, building materials, chemical products, consumer products, energy, food and other sectors. The fund provides a vehicle to investors who wish to invest in Mexican companies through a managed non-diversified portfolio as part of their overall investment program.

Executives

Tofi Dayan	officer: Treasurer	77 ARISTOTELES STREET, 3RD FLOOR, POLANO O5 11560
Claudia Janez	director	BOSQUE DE ZAPOTES 12, BOSQUES DE LAS LOMAS, CIUDAD DE MEXICO O5 11700
Alberto Gomez Pimienta	officer: Operations Vice President	THE MEXICO FUND, INC., 1775 I STREET, NW, WASHINGTON DC 20006
Alberto Osorio	officer: Sr VP, Treasurer and CFO	C/O MEXICO FUND, 1775 I STREET NW, WASHINGTON DC 20006
Jorge Alamillo	officer: Chief Compliance Officer	77 ARISTOTELES STREET, 3RD FLOOR, POLANCO MEXICO DF O5 11560
Edward P Djerejian	director	2027 SUNSET BOULEVARD, HOUSTON TX 77005
Jonathan Davis Arzac	director	MONTE PELVOUX 220 PISO 6, LOMAS DE CHAPULTEPEC O5 11000
Marc J Shapiro	director	J.P. MORGAN CHASE & CO., 270 PARK AVENUE, NEW YORK NY 10017
Impulsora Del Fondo Mexico Sa De Cv	other: Investment Adviser	77 ARISTOTELES, POLANCO MEXICO DF O5 11560
Robert L Knauss	director	5151 SAN FELIPE, SUITE 1661, HOUSTON TX 77056
Emilio Carrillo Gamboa	director	C/O DECHERT,1775 EYE STREET NW, 1775 EYE STREET NW, WASHINGTON DC 20006
Eugenio Clariond	director	VASCONCELOS 220 OTE., COL. RESIDENCIAL SAN AGUSTIN, SAN PEDRO GARZA GARCIA, N.L. O5 66260
Gomez Pimienta Jose Luis	director	77 ARISTOTELES, 3RD FLOOR, POLANCO D.F. O5 11560
Puche Jaime Serra	director	C/O DECHERT,1775 EYE STREET NW, 1775 EYE STREET NW, WASHINGTON DC 20006
Jose Luis Gomez Pimienta	director