Buffett and beyond uncovering the secret ratio for superior stock selection

Buffett and Beyond
Contents
Preface: From Then Until Now
Introduction: A Sea Story
Chapter 1: The Purpose of This Book—Your Journey
Chapter 2: About Warren Buffett
Chapter 3: Determining the Earning Capacity of a Company (Now Really, Can It Be This Easy?)
	The Beach Factor
	Clean Surplus
	Determining an Efficient Company
	Take Your Bank Account
	Bonds
	Earning Capacity
	How to Determine the Operating Efficiency of a Company
	Sooo Important
	You See . . . ROE Tells Us Everything
	Let’s Ask Warren
	Summary—the Key to the Investing Business
	Why Hasn’t the Entire World Figured This Out Yet?
	You Will Learn
Chapter 4: My Theory of Why Most Money Managers of the World Cannot Outperform the Market Averages
	My Contest—Beware How You Select the Random Portfolio
		Back to My Students
	One Step Beyond Buffett
	You Don’t Have to Worry
	Fun with Our Portfolio Reviews
	In Summary
Chapter 5: A Very Simple Income Statement and an Even Simpler Balance Sheet
	The Income Statement
	The Balance Sheet
	Tying Together the Income Statement and Balance Sheet
		The Link Between the Income Statement and Balance Sheet
Chapter 6: The Return on Equity Ratio
	This Chapter and the Next and the Next
Chapter 7: The Return Portion of the Return on Equity Ratio
	The Income Statement: Return
Chapter 8: The Equity Portion of the Return on Equity
	Earnings
	Accounting Statements and the Link between Them
	The General Motors Story
	The Central Flaw of Traditional Accounting
	Let’s Not Forget the Main Question
	Addendum to The General Motors Story
Chapter 9: How to Determine an Equitable Equity Number
	Let’s Review Just a Bit
	Our New Return on Equity Equation
	What Does Warren Buffett Say about All This?
Chapter 10: The Predictability of Finance Valuation Models
	Efficiency Is the Key
	College and Finance Valuation Models—They Just Don’t Work Very Well
Chapter 11: Clean Surplus ROE—the Only Comparable Efficiency Ratio
	Clean Surplus
	I Forget, What Are We Looking For? Let’s Review!
Chapter 12: What Buffett Looks for in a Company, or How Clean Surplus Accounting Recognizes the Quality of a Company
	Buffett
	The Consumer Monopoly versus the Commodity Type of Business
	The Commodity Type of Business: Companies Buffett Avoids
	The Consumer Monopoly: The Type of Business Buffett Loves
Chapter 13: General Electric Then and Now
	The Purchase Price
	Back to Basics
	A Very Important Point
	Back to the Good Bank
		The Account of Bank B
	Beware, Beware, Beware
	A Real Stock
	The P/E Ratio
	Back to the Future
	Let’s Discount Back—the All Important Purchase Price
	Important Note: Approximately
	Very Important Addendum
Chapter 14: General Motors Then and Now
	Let’s Look at General Motors
	High ROE
	Consistency Up to 2002
	Compare
	The Blind Kid—A Sea Story
	A Lesson to Be Learned
	So You See, Folks
	Addendum to the General Motors Saga
Chapter 15: The Beginning: The Initial Research
	Why Work with the Dow 30?
	Constructing the Portfolio: My First Research into Clean Surplus
	Methodology
	1987: The Year of the Anomaly
	Buffett the Anomaly
	More Parameters: The Simple Rules
	The Test Period Parameters
	The Results
	Compounded Returns
	Is There a Correlation Between the ROEs and the Returns?
	Getting Published in an Academic Journal
Chapter 16: Continuing Research: The Doctoral Research on the S&P 500
	Finally, a Lead for Clean Surplus Accounting—Buffett, Graham, Ohlson
	The Results of the Research
	Methodology
	Notice the Difference
	Standardized Against the Market
	Portfolio Construction
	Results: First Test Period
	Results: Second Test Period
	Bias
		Large Cap Bias
	Summary of Results
		Other Work
Chapter 17: Rules for Structuring a Great Growth Portfolio
	Debt
Chapter 18: Great, Great Job, but You’re Fired
	A New Definition
	The Research Begins
	The First Class
		Barbara
	To Teach or Not to Teach?
		Several Things
Chapter 19: Stocks on Our Radio Show
	Back in 2012
	The Structure of This Report
Chapter 20: Stories of Audience Hecklers
	The Know-It-All Half-Back
Chapter 21: A Great Dividend Income and Growth Strategy—Part I: The Economic Spectrum of Dividend Stocks
	Portfolio Parameters
	The Four Stages of the Business Life Cycle
	The Maturity Stage
Chapter 22: A Great Dividend Income and Growth Strategy—Part II: Selecting Stocks That Are Growing Their Dividends for Our Portfolio
Chapter 23: A Great Dividend Income and Growth Strategy—Part III: Selecting Stocks That Are Growing in Price for Our Portfolio
	Philip Morris International
	AT&T
	A Pretty Good Portfolio Stock
Chapter 24: Enhanced Income
	Covered Option Writing
	What Does This Have to Do with Options?
	What? Give Up My Stock? Shame on You!
		A Few Basics
		But I Want to Keep My Stock
	A Bit of Technical Analysis
Chapter 25: Portfolio Insurance
	What Does Buffett Do?
	So What Can We Do?
	Ok, So What Can We Do to Take the Guessing out of Investing?
	The Amazing Thing About Portfolio Insurance
	Market Crash Mentality
	Back to the Crash Mentality
	Which Scenario Do You Prefer?
	How Do We Insure Our Portfolios?
	Cash, Cash, Cash
	But How Much Cash?
	What Do We Mean by Market Conditions?
Chapter 26: What Have You Learned? A Summary
	Dividend Income and Growth Strategy
	Portfolio Insurance and Enhanced Income
	Putting the Odds of Success on My Side
Chapter 27: We Won’t Leave You Out There Alone
	www.wiley.com/go/buffettandbeyond
	The Weekly Video
	The Computer Program
	Tutorial Videos
	For Individual Investors
	For Professional Money Managers, Wealth Managers, and Investment Advisors
	In Summary: I’m Still a Teacher
About the Author
Index
EULA