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Prime Impact Acquisition I (Prime Impact Acquisition I) Predictability Rank


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What is Prime Impact Acquisition I 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.

Prime Impact Acquisition I 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

Prime Impact Acquisition I Predictability Rank Related Terms

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Prime Impact Acquisition I (Prime Impact Acquisition I) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Financial Services » Diversified Financial Services » Prime Impact Acquisition I (OTCPK:PRIAF) » Definitions » Predictability Rank
Comparable Companies
FACA CLAA GMBT PRSR FOUN GATE PFDR HCAR PSAG MUDS GSHN PSTH XAMS:EPIC ASZ CCYC CVII KAHC DWAC IPOF PBAJ
Traded in Other Exchanges
N/A
Address
123 East San Carlos Street, Suite 12, San Jose, CA, USA, 95112
Website
https://www.primeimpactcapital.com
Prime Impact Acquisition I is a blank check company.
Executives
Frank Brosens 10 percent owner C/O TACONIC CAPITAL ADVISORS LP, 280 PARK AVENUE, 5TH FLOOR, NEW YORK NY 10017
Taconic Capital Advisors Uk Llp 10 percent owner 55 GROSVENOR STREET, 4TH FLOOR, LONDON X0 W1K 3HY
Taconic Capital Advisors Lp 10 percent owner 280 PARK AVENUE, 5TH FLOOR, NEW YORK NY 10017
Taconic Capital Advisors (hong Kong) Ltd 10 percent owner UNIT 1601, 16TH FLOOR, RUTTENJEE HOUSE, RUTTENJEE CTR, 11 DUDDELL STREET, HONG KONG K3 00000
Michael D Cordano officer: Co-Chief Executive Officer C/O WESTERN DIGITAL CORPORATION, 5601 GREAT OAKS PARKWAY, SAN JOSE CA 95119
Mark P Long director, officer: Co-Chief Exec. Officer and CFO C/O WESTERN DIGITAL CORPORATION, 5601 GREAT OAKS PARKWAY, SAN JOSE CA 95119
Cathleen A Benko director ONE BOWERMAN DRIVE, BEAVERTON OR 97005
Dixon Doll director 2420 SAND HILL RD, STE 200, MENLO PARK CA 94025
Keyur A Patel director
Joanna A Strober director C/O SYMPHONY TECHNOLOGY GROUP, 4015 MIRANDA AVENUE, SECOND FLOOR, PALO ALTO CA 94304
Prime Impact Cayman, Llc 10 percent owner 360 S MARKET STREET, #2202, SAN JOSE CA 95113
Roger Crockett director 123 E. SAN CARLOS STREET, SUITE 12, SAN JOSE CA 95113