TDF (Templeton Dragon Fund) Predictability Rank

View and export this data going back to . Start your Free Trial

What is Templeton Dragon Fund 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.

Templeton Dragon Fund 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

Templeton Dragon Fund Predictability Rank Related Terms

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

Templeton Dragon Fund Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Templeton Dragon Fund Inc (NYSE:TDF) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

300 S.E. 2nd Street, Fort Lauderdale, FL, USA, 33301-1923

Website

https://www.franklintempleton.com

Templeton Dragon Fund Inc is a closed-end management investment company. The fund seeks long-term capital appreciation by investing majority of its total assets in equity securities of China companies. It invests in various sectors such as gas & consumable fuels, auto components, banks, beverages, communications equipment, healthcare equipment & supplies, restaurants & leisure, household durables and many others.

Executives

Christine M. Debevec	officer: VP & Assistant Secretary	ONE FRANKLIN PARKWAY, SAN MATEO CA 94403
George P. Hoyt	officer: VP & Secretary	C/O FRANKLIN TEMPLETON, 100 FIRST STAMFORD PLACE, STAMFORD CT 06902
Ted P Becker	officer: Chief Compliance Officer	399 PARK AVENUE, 4TH FLOOR, NEW YORK NY 10022
Oliveira Marc De	officer: VP & Assistant Secretary	C/O LEGG MASON & CO. LLC, ONE FIRST STAMFORD PLACE, STAMFORD CT 06902
Alexander Kymn	officer: VP & Assistant Secretary	WELLS FARGO BANK, 45 FREMONT STREET, 26TH FLOOR, SAN FRANCISCO CA 94105
Tara E. Gormel	officer: VP & Assistant Secretary	ONE FRANKLIN PARKWAY, SAN MATEO CA 94403
Harris Goldblat	officer: VP & Assistant Secretary	ONE FRANKLIN PARKWAY, SAN MATEO CA 94403
Terrence J. Checki	director	HESS CORPORATION, 1185 AVENUE OF THE AMERICAS, NEW YORK NY 10036
Christopher Kings	officer: CFO, CAO and Treasurer	ONE FRANKLIN PARKWAY, SAN MATEO CA 94403
Ryan Wheeler	officer: Interim CFO, CAO and Treasurer	300 S.E. 2ND STREET, FORT LAUDERDALE FL 33301
Susan Kerr	officer: VP - AML Compliance	280 PARK AVENUE, NEW YORK NY 10017
City Of London Investment Group Plc	10 percent owner	77 GRACECHURCH STREET, LONDON X0 EC3V0AS
Manraj S Sekhon	officer: President and CEO - IM	7 TEMASEK BOULEVARD, #38-03 SUNTEC TOWER ONE, SINGAPORE U0 038987
Bates Ann Torre	director	300 CONTINENTAL DRIVE, NEWARK DE 19713
Matthew T. Hinkle	officer: CEO - Finance & Admin	3344 QUALITY DRIVE, RANCHO CORDOVA CA 95670-7313