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PDOT.U (Peridot Acquisition II) Predictability Rank


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What is Peridot Acquisition II 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.

Peridot Acquisition II 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

Peridot Acquisition II Predictability Rank Related Terms

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Peridot Acquisition II Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Financial Services » Diversified Financial Services » Peridot Acquisition Corp II (NYSE:PDOT.U) » Definitions » Predictability Rank
Comparable Companies
EPHY VGII FMAC CTAQ OHPA TCVA JOFF IMPX AGAC PACX GSHN PSTH XAMS:EPIC ASZ CCYC CVII KAHC DWAC IPOF PBAJ
Traded in Other Exchanges
N/A
Address
2229 San Felipe Street, Suite 1450, Houston, TX, USA, 77019
Website
https://www.peridotspac.com
Peridot Acquisition Corp II is a blank check company.
Executives
Scott M Prochazka director 1111 LOUISIANA, HOUSTON TX 77002
Tomas Ackerman director, 10 percent owner 2229 SAN FELIPE, SUITE 1450, HOUSTON TX 77019
Daniel Goodman 10 percent owner 2229 SAN FELIPE, SUITE 1450, HOUSTON TX 77019
Alan B Levande director 1155 PARK AVENUE, NEW YORK NY 10128
Carnelian Energy Capital Iii, L.p. 10 percent owner 2229 SAN FELIPE, SUITE 1450, HOUSTON TX 77019
Preston Powell director, officer: Chief Executive Officer 2229 SAN FELIPE STREET, SUITE 1450, HOUSTON TX 77019
June Yearwood director 2229 SAN FELIPE STREET, SUITE 1450, HOUSTON TX 77019
Carnelian Energy Capital Holdings, Llc 10 percent owner 2229 SAN FELIPE STREET, SUITE 1450, HOUSTON TX 77019
Carnelian Energy Capital Gp Iii, L.p. 10 percent owner 2229 SAN FELIPE STREET, SUITE 1450, HOUSTON TX 77019
Cec Aventurine Holdings, Llc 10 percent owner 2229 SAN FELIPE STREET, SUITE 1450, HOUSTON TX 77019
Peridot Acquisition Sponsor Ii, Llc 10 percent owner 2229 SAN FELIPE STREET, SUITE 1450, HOUSTON TX 77019
Stephen Wedemeyer officer: Chief Financial Officer C/O PERIDOT ACQUISITION, 2229 SAN FELIPE STREET, SUITE 1450, HOUSTON TX 77019

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