What is ContextLogic 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.
ContextLogic 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
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
ContextLogic (ContextLogic) Business Description
Traded in Other Exchanges
Address
One Sansome Street, 33rd Floor, San Francisco, CA, USA, 94104
ContextLogic Inc is an online shopping store. The store provides personalized products, clothing products, accessories, gaming products and equipment, cosmetics, plastic products, mobile covers, and other products. Geographically, it derives a majority of revenue from Europe and also has a presence in North America; South America, and other countries.
Executives
| Jerry Louis |
officer: Chief Technology Officer |
ONE SANSOME STREET, 33RD FLOOR, SAN FRANCISCO CA 94104 |
| Stephanie Tilenius |
director |
C/O IRONPLANET, INC., 4695 CHABOT DRIVE, SUITE 102, PLEASANTON CA 94588 |
| Mauricio Monico |
officer: Chief Product Officer |
ONE SANSOME STREET 33RD FLOOR, SAN FRANCISCO CA 94104 |
| Jun Yan |
officer: CEO |
ONE SANSOME STREET, 33RD FLOOR, SAN FRANCISCO CA 94104 |
| Ying Vivian Liu |
officer: CFO and COO |
ONE SANSOME STREET 33RD FLOOR, SAN FRANCISCO CA 94104 |
| Lawrence M Kutscher |
director |
ONE DIAMOND HILL RD, MURRAY HILL NJ 07974 |
| Brett Just |
officer: SVP, Finance |
ONE SANSOME STREET 40TH FLOOR, SAN FRANCISCO CA 94104 |
| Shuyan (rachel) Wang |
officer: Head of Data Science |
ONE SANSOME STREET 33RD FLOOR, SAN FRANCISCO CA 94104 |
| Tarun Kumar Jain |
officer: Chief Product Officer |
ONE SANSOME STREET 40TH FLOOR, SAN FRANCISCO CA 94104 |
| Vijay Talwar |
director, officer: Chief Executive Officer |
705 FIFTH AVENUE SOUTH, SUITE 900, SEATTLE WA 98104 |
| Piotr Szulczewski |
director, 10 percent owner, officer: Founder, CEO, and Chairperson |
ONE SANSOME STREET 40TH FLOOR, SAN FRANCISCO CA 94104 |
| Hans Tung |
director |
3000 SAND HILL ROAD, BUILDING 4, SUITE 230, MENLO PARK CA 94025 |
| Pai Liu |
officer: Vice President of Data Science |
ONE SANSOME STREET 40TH FLOOR, SAN FRANCISCO CA 94104 |
| Devang Shah |
officer: General Counsel and Secretary |
699 8TH STREET, SAN FRANCISCO CA 94103 |
| Hamid Reza Kassaei |
officer: Chief Technology Officer |
ONE SANSOME STREET 40TH FLOOR, SAN FRANCISCO CA 94104 |
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