Investor Education
Another metric that we look at when evaluating a company is Return on Invested Capital (ROIC). Return on invested capital is a way that investors can determine a management team’s efficiency of allocating capital. Return on Invested Capital is usually calculated by taking Net Operating Profit After Tax (NOPAT) and dividing it by Invested Capital. Net Operating After Tax is equal to Earnings Before Interest and Taxes (EBIT), also known as operating income, times one minus the tax rate.
Read our Overview of Return on Invested Capital.
Co/nversations Podcast
Success doesn’t come alone; it comes with others. Who influenced your life to shape you into the person you are today? What inspires and motivates you?
This week, we had the pleasure of hosting Jamey Whetstone as our guest on the Co/nversations podcast.
Jamey Whetstone is the Winemaker of Fresh Vine Wine and Owner of Whetstone Wine Cellars in Napa, California. This episode dives into Jamey's career journey of becoming a winemaker, the differences between wine culture in France and the U.S., and reminds us about the importance of slowing down to truly connect with other people.
Listen on Apple Podcasts and Spotify below!
The Stoic Sage
“Seen this way, Stoicism is about the domestication, not necessarily the elimination, of emotions. It is not about turning humans into vegetables. My idea of the modern Stoic sage is someone who transforms fear into prudence, pain into information, mistakes into initiation, and desire into undertaking.” —Nassim Taleb (“Antifragile”)
The philosophy of Stoicism has gained new popularity over the last decade thanks to writers like Nassim Taleb, Ryan Holiday, and Tim Ferriss, among others. People often confuse being a Stoic (capital ‘S’) with being stoic (lower-case ‘s’). Stoicism the philosophy isn’t about being unemotional and having a “stiff upper lip.” It’s about focusing on what you can control. It’s about focusing on your actions.
“He is a wise man who does not grieve for the things which he has not, but rejoices for those which he has.” —Epictetus
The stock market concluded its worst first-half since 1970 this past week, with the S&P 500 down 20.6% and the Nasdaq down 29.5%. A dose of Stoicism might be a helpful remedy if you’ve been a long investor during the first six months of the year.
And it’s not just stocks. Bonds are down too. And many technology stocks are down somewhere in the 50-90% range. How you handle the uncertainty and stress that you might feel today will go a long way in determining your ability to recover and/or profit from this volatility. As another Stoic, James Stockdale, wrote in his book Thoughts of a Philosophical Fighter Pilot:
Stress is essential to leadership. Living with stress, knowing how to handle pressure, is necessary for survival. It is related to a man's ability to wrest control of his own destiny from the circumstances that surround him or, if you like, to prevail over technology. Tied up with this ability is something thing I can express in one word, "improvisation." I mean man's ability to prepare a response to a situation while under pressure.
George Bernard Shaw said that most people who fail complain that they are the victims of circumstances. Those who get on in this world, he said, are those who go out and look for the right circumstances. And if they can't find them they make their own.
Tweet of the Week
In Case You Missed It…
J.P. Morgan Asset Management’s Guide to the Markets
Wealth vs. Getting Wealthier - by Morgan Housel
Why Wide Moat Businesses May Not Be a Good Investment
Business Breakdowns Podcast: Berkshire Hathaway: The Incomparable Compounder
The Intellectual Investor Podcast: Charter Communications: Heads We Win, Tails We Don’t Lose
Chit Chat Money Podcast: Joint Corp (JYNT) with Edward Chang
The Knowledge Project Podcast: #141 Kunal Shah: Core Human Motivations
If you have not already upgraded your membership…
Avenel Financial Group, a merchant banking and advisory firm located in Charlotte, NC, launched a new business venture called the Co/Investor Club. The Co/Investor Club is a community of value-oriented investors that collaborate on investment opportunities and ideas. You are receiving this newsletter because you are a Free or Premium Member of the Co/Investor Club!
Chat with Mike
Whether you’re an executive with investment opportunities or a college student looking to network, we would love to chat with you!
Email our Founder, Mike Pruitt, at mp@coinvestorclub.com with questions and ideas or schedule a meeting.
Don’t forget to follow us on social media too!
Twitter:
LinkedIn:
For our disclaimer, please visit our website
Have friends that want to join? The Co/Report is public, so feel free to share!
Thank you for reading. Co/Report grows through word of mouth. Please consider sharing this post with someone who might appreciate it.