Polished.com (Polished.com) Predictability Rank

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What is Polished.com 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.

Polished.com 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

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Polished.com (Polished.com) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Polished.com Inc (OTCPK:POLCQ) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

1870 Bath Avenue, Brooklyn, NY, USA, 11214

Website

https://www.polished.com

Polished.com Inc is an e-commerce destination for home furnishings, appliances, furniture, home goods, and related products. It sells various products such as refrigerators, ranges, ovens, dishwashers, microwaves, freezers, washers, and dryers. The firm's brand portfolio consists of Bosch, Whirlpool, GE, Maytag, LG, Samsung, Sharp, and Kitchen Aid, among others.

Executives

Houman Akhavan	director	C/O U. S. AUTO PARTS NETWORK, INC., 17150 SOUTH MARGAY AVENUE, CARSON CA 90746
John E. Bunka	officer: Interim CEO	C/O POLISHED.COM INC., 1870 BATH AVENUE, BROOKLYN NY 11214
James M Schneider	director	C/O GAP, INC., 2 FOLSOM ST., SAN FRANCISCO CA 94105
Maria Johnson	officer: Chief Financial Officer	C/O 1847 GOEDEKER INC., 3817 MILLSTONE PARKWAY, ST. CHARLES MO 63301
Albert Fouerti	director	C/O 1847 GOEDEKER INC., 3817 MILLSTONE PARKWAY, ST. CHARLES MO 63301
Clark R. Crosnoe	director	13850 MANCHESTER RD, C/O 1847 GOEDEKER INC.,, BALLWIN MO 63011
Glyn C. Milburn	director	13850 MANCHESTER RD, C/O 1847 GOEDEKER INC., BALLWIN MO 63011
Gary Alan Shaw	director	C/O 1847 GOEDEKER INC., 3817 MILLSTON PARKWAY, ST. CHARLES MO 63301
Selim A Bassoul	director	C/O MIDDLEBY CORP, 1400 TOASTMASTER DRIVE, ELGIN IL 8477413300
Thomas S. Harcum	officer: CMO and CTO	C/O 1847 GOEDEKER INC., 13850 MANCHESTER RD., BALLWIN MO 63011
Alan P. Shor	director	C/O 1847 GOEDEKER INC., 3817 MILLSTONE PARKWAY, ST. CHARLES MO 63301
Jacob Guilhas	officer: VP of Logistics	13850 MANCHESTER RD., BALLWIN MO 63011
1847 Holdings Llc	10 percent owner	590 MADISON AVENUE, 21ST FLOOR, NEW YORK NY 10022
Edward Tobin	director	C/O GEM SURGILIGHT INVESTORS, LLC, 9 WEST 57TH STREET, 46TH FLOOR, NEW YORK NY 10022
1847 Goedeker Holdco Inc.	10 percent owner	13850 MANCHESTER RD., BALLWIN MO 63011