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Pershing Gold (Pershing Gold) Predictability Rank


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What is Pershing Gold 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.

Pershing Gold 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

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%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 Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-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

Also read:

Part II: What worked in the market from 1998-2008? Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety

Pershing Gold Predictability Rank Related Terms

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Pershing Gold (Pershing Gold) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Pershing Gold Corp (NAS:PGLC) » Definitions » Predictability Rank
Comparable Companies
PHS:MA TSXV:SSP TSXV:TXR TSXV:F ASX:OKU TSXV:MJS ASX:PRX ASX:KCN ASX:IRC ASX:ERM TSXV:FISH TSXV:AXM TSXV:VLC TSXV:MGZ.H TSX:TML LSE:CNG LSE:SRB TSX:ER PHS:UPM TSX:RMX
Traded in Other Exchanges
N/A
Address
1658 Cole Boulevard, Building 6, Suite 210, Lakewood, CO, USA, 80401
Website
http://www.pershinggold.com
Pershing Gold Corp is a gold and precious metals exploration company. It pursues exploration, development and mining opportunities primarily in Nevada. The company currently focuses on exploration at its Relief Canyon properties in Pershing County in northwestern Nevada. The Relief Canyon properties are located about 100 miles northeast of Reno, Nevada. It operates its business directly and also through its wholly-owned subsidiary, Gold Acquisition Corp. The company seek properties with known mineralization that are in an advanced stage of exploration and have previously undergone drilling but are under-explored.
Executives
Jeffrey G Clevenger director 1700 LINCOLN STREET, SUITE 3050, DENVER CO 80203
Barry C Honig 10 percent owner 215 SE SPANISH TRAIL, BOCA RATON FL 33432
Edward M Karr director RAMPARTNERS, 19 BLVD GEORGES-FAVON, GENEVA V8 1204
Timothy Mark Janke officer: Chief Operating Officer 5625 PATRICIAN WAY, WINNEMUCCA NV 89445
Eric Alexander officer: VP Finance and Controller 1658 COLE BLVD., BLDG. 6, SUITE 210, LAKEWOOD CO 80401
Alex G Morrison director 1658 COLE BLVD., BLDG. 6, SUITE 210, LAKEWOOD CO 80401
Douglass Scott Barr director 10901 WEST TOLLER DRIVE, SUITE 300 LITTLETON CO 80127-6312
Frost Gamma Investments Trust 10 percent owner 4400 BISCAYNE BLVD, MIAMI FL 33137
David Rector director
Adam C Wasserman officer: Chief Financial Officer 1643 ROYAL GROVE WAY, WESTON FL 33327