Core Scientific (Core Scientific) Predictability Rank

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What is Core Scientific 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.

Core Scientific 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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Core Scientific (Core Scientific) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Core Scientific Inc (OTCPK:CORZQ) » Definitions » Predictability Rank

Comparable Companies

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Traded in Other Exchanges

CORZ:USA

Address

210 Barton Springs Road, Austin, TX, USA, 78704

Website

https://www.corescientific.com

Core Scientific Inc is engaged in Blockchain and AI Infrastructure, Digital Asset Self-Mining, Premium Hosting, Blockchain Technology, and Artificial Intelligence related services. The business operates in two segments being; Equipment Sales and Hosting which consists of blockchain infrastructure, third-party hosting business and equipment sales to customers. Mining segment consists of digital asset mining for its account. The blockchain business generates revenue from the sale of consumption-based contracts and by providing hosting services. The digital asset mining segment earns revenue from operating a firm's owned computer equipment as part of a pool of users that process transactions conducted on one or more blockchain networks. In exchange, it receives digital currency assets.

Executives

Adam Taylor Sullivan	officer: President	C/O CORE SCIENTIFIC, INC., 2407 S. CONGRESS AVENUE, AUSTIN TX 78704
Darin Feinstein	director, 10 percent owner, officer: Chief Vision Officer	2800 NORTHUP WAY, SUITE 220, BELLEVUE WA 98004
Sterling Denise Marie Brucia	officer: Chief Financial Officer	C/O CORE SCIENTIFIC, INC., 201 BARTON SPRINGS ROAD, AUSTIN TX 78704
Matt Minnis	director	2800 NORTHUP WAY, SUITE 220, BELLEVUE WA 98004
Brian Neville	officer: Chief Accounting Officer	C/O CORE SCIENTIFIC, INC., 2800 NORTHROP WAY, BELLEVUE WA 98004
Todd M Duchene	officer: EVP, GC and Secretary	847 GIBRALTAR DR., MILPITAS CA 95035
Michael Trzupek	officer: Chief Financial Officer	2800 NORTHUP WAY, SUITE 220, BELLEVUE WA 98004
Stacie Olivares	director	2525 E. CAMELBACK RD., STE 850, PHOENIX AZ 85016
Jarvis V. Hollingsworth	director	100 WEST HOUSTON STREET, SAN ANTONIO TX 78205
Michael J Levitt	director, officer: Chief Executive Officer	KAYNE ANDERSON CAPITAL ADVISORS, L.P., 1800 AVENUE OF THE STARS, 3RD FLOOR, LOS ANGELES CA 90067
Dr Kneeland Youngblood	director	C/O GAP, INC., 2 FOLSOM ST., SAN FRANCISCO CA 94105
John P Mcgarrity	officer: General Counsel and Secretary	321 N. CLARK STREET, CHICAGO IL 60054
Sullivan Colleen	director	420 EXECUTIVE SQUARE SUITE 300, LA JOLLA CA 92037
Theodore J Brombach	10 percent owner	321 N. CLARK STREET, CHICAGO IL 60054
Patrick C Eilers	director, 10 percent owner, officer: Chief Executive Officer	THREE FIRST NATIONAL PLAZA STE 3800, CHICAGO IL 60602