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STQN (Strategic Acquisitions) Predictability Rank


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What is Strategic Acquisitions Predictability Rank?

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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.

Strategic Acquisitions 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

Strategic Acquisitions Predictability Rank Related Terms

Thank you for viewing the detailed overview of Strategic Acquisitions's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

Strategic Acquisitions Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Financial Services » Credit Services » Strategic Acquisitions Inc (OTCPK:STQN) » Definitions » Predictability Rank
Comparable Companies
COSG DXF WINSF AIHS BWMY RAHGF FAVO LMFA V MA AXP PYPL BOM:500034 COF DFS TSE:8591 SYF BOM:543257 BOM:532810 XPAR:EDEN
Traded in Other Exchanges
N/A
Address
51 JFK Parkway, Suite 135, Short Hills, NJ, USA, 07078
Website
https://www.strategicla.com
Strategic Acquisitions Inc is engaged in providing loans collateralized by digital assets. The firm's platform under development will facilitate the origination and servicing of digital asset-backed loans and will consist of a customer-facing website, a mobile application, and a loan management system used to monitor the loans made by the firm. The Platform will provide an integrated service for the origination, documentation, and servicing of collateralized loans.
Executives
Exworth Management Llc 10 percent owner 51 JFK PARKWAY, 1ST FLOOR WEST #135, SHORT HILLS NJ 07078
Yuanyuan Huang director, officer: Secretary and Treasurer 51 JFK PARKWAY SUITE 135, SHORT HILLS NJ 07078
Wei Huang director 3303 BELMONT RIVER LN, KATY TX 77494
Jonathan Braun director 1459 SHUNPIKE RD., CAMBRIDGE NY 12816
John P Oshea director, officer: President C/O WESTMINSTER SECURITIES CORP, 100 WALL ST, 7TH FLOOR, NEW YORK NY 10005
Nextcoal International, Inc. 10 percent owner 1459 SHUNPIKE ROAD, CAMBRIDGE NY 12816
Marika Xirouhakis director, officer: Secretary 100 WALL ST, 7TH FL, NEW YORK NY 10005
Deborah A Salerno other: Exiting 10% Owner 75 MAIDEN LANE SUITE 214, NEW YORK NY 10280
Victor Edwin Stewart other: Resigning Director
Richard S Kaye other: Resigning Director

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