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Which companies are most likely to grow earnings 10%+/year on average next ten years?


flesh
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As the title suggests, which companies are closest to guaranteed to grow earnings 10%/year or more next ten years?

Key word being guaranteed. Yes, obviously no such thing, you get it. 10% avg per year, the probability is extremely high absent WMDs. 

Current valuation irrelevant. 

I'll start 

-fb, goog, nflx, chtr,  mkl, kkr, bld, baba, amzn. Brk is a maybe, probability high, maybe less than 10 though. 

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Posted (edited)
7 hours ago, flesh said:

As the title suggests, which companies are closest to guaranteed to grow earnings 10%/year or more next ten years?

Key word being guaranteed. Yes, obviously no such thing, you get it. 10% avg per year, the probability is extremely high absent WMDs. 

Current valuation irrelevant. 

I'll start 

-fb, goog, nflx, chtr,  mkl, kkr, bld, baba, amzn. Brk is a maybe, probability high, maybe less than 10 though. 

This is a great question.

  • CHTR: Unless you can guarantee interest rates won't move up much, I wonder if you can say chtr is guaranteed to grow earnings at 10% per year given how much of their $85B debt load (~4.5X LTM "adjusted" EBITDA) will be coming up for renewal in the next 10 years.  Please see https://ir.charter.com/static-files/d1c4000e-a138-4a3b-9d66-b6411c5d29fa.
  • FB, GOOG, NFLX, BABA, AMZN: The question is what will happen to their stock price if the current market prediction that they will each earn more than 10% per year turns out to be incorrect.  It might sound like impossible now when looking towards the future, but I think when we look back at this list 10 years from now, I wouldn't be surprised if we find that Mr. Market had predicted one or more of them wrong. 
  • MKL, KKR: I don't know enough to comment.
Edited by LearningMachine
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Posted (edited)

BLD, MKL, and DVA are unlikely to make the cut, imo.

My candidates are :

VRTX ( biotech, mini Pharma)

ADSK (software)

GMED ( med device)

PYPL ( payments)

MORN (financial info)

disclosure: own smallish stakes in VRTX and GMED

 

 

 

Edited by Spekulatius
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^ DaVita won't grow EPS organically without buy-backs at attractive prices, but with them, they will.

There is pretty natural 3-5% organic growth built in with the obesity crisis - recessions won't matter - they'll grow through that.

But with the share count cut in half in 7 years, the per share growth has been stellar. Unless the stock gets terrifically overpriced, it'll work out.

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I agree with KKR.

I would not put BRK on the list given the question.  For BRK, I'm assuming we aren't taking a strict view of earnings, but more of a pick-your-value growth metric.  Almost guarantee 10%+/year on average?  I definitely would not say that.  If I had to put an over/under on BRK for the next 10 years, I'd probably pick 9%.  I wouldn't argue if someone said 10%, but that is more of a 50-50 proposition.  Guaranteed 10+ - no way.

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Posted (edited)
3 hours ago, cubsfan said:

^ DaVita won't grow EPS organically without buy-backs at attractive prices, but with them, they will.

There is pretty natural 3-5% organic growth built in with the obesity crisis - recessions won't matter - they'll grow through that.

But with the share count cut in half in 7 years, the per share growth has been stellar. Unless the stock gets terrifically overpriced, it'll work out.

As long as there is a chance that regulations like Proposition 8 to cap profits might be enacted, hard to say it is a guarantee: https://www.scientificamerican.com/article/kidney-dialysis-is-a-booming-business-is-it-also-a-rigged-one1/.  After reading this article, I also wonder how yucky it feels to some compared to other businesses.

Edited by LearningMachine
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Isnt it amazing how people literally eat themselves to death and then when it comes time to pay(literally) for it, politicians want to hold other people accountable for it? Its truly amazing and never going to get to the root of the problems. Even at my 4 year olds t ball games, its incredible to me how many of these fat pig parents are just camped out in a folding chair, chowing on snacks the entire time. Do people not have any respect for themselves?

America, the land of waning accountability. 

 

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11 minutes ago, LearningMachine said:

As long as there is a chance that regulations like Proposition 8 to cap profits might be enacted, hard to say it is a guarantee: https://www.scientificamerican.com/article/kidney-dialysis-is-a-booming-business-is-it-also-a-rigged-one1/.  After reading this article, I also wonder how yucky it feels to some compared to other businesses.

Keeping people alive is quite a noble business, hardly yucky. Plenty of trash articles like that out there on dialysis. They have been around for 30 years. Just call Jim Chanos for the real garbage. Prop 8 proponents will never go away - and when it gets the headlines, the buybacks get even more powerful.

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11 minutes ago, cubsfan said:

Keeping people alive is quite a noble business, hardly yucky. Plenty of trash articles like that out there on dialysis. They have been around for 30 years. Just call Jim Chanos for the real garbage. Prop 8 proponents will never go away - and when it gets the headlines, the buybacks get even more powerful.

My heart goes out to those who help people keep alive.  I meant taking advantage of people at that stage feels yucky. 

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On 5/28/2021 at 11:33 AM, Gregmal said:

Isnt it amazing how people literally eat themselves to death and then when it comes time to pay(literally) for it, politicians want to hold other people accountable for it? Its truly amazing and never going to get to the root of the problems. Even at my 4 year olds t ball games, its incredible to me how many of these fat pig parents are just camped out in a folding chair, chowing on snacks the entire time. Do people not have any respect for themselves?

America, the land of waning accountability. 

 

Buffet talks about the healthcare industry as the tapeworm of the US.  How we spend 18% on healthcare cost.  Have we looked in the mirror at ourselves and look at our BMIs?  The average American BMI is 26.6.  The average Singaporean BMI is probably a lot lower. 

Now that I am an annoying Keto person, I do think that all the additive, sugar, and sugar substitutes do cause a lot of craving 

Americans can really benefit from eating Paleo, Keto, Whole 360 and implementing fasting occasionally.  Our national health cost will probably go down quite a bit.  

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9 hours ago, BG2008 said:

Buffet talks about the healthcare industry as the tapeworm of the US.  How we spend 18% on healthcare cost.  Have we looked in the mirror at ourselves and look at our BMIs?  The average American BMI is 26.6.  The average Singaporean BMI is probably a lot lower. 

Now that I am an annoying Keto person, I do think that all the additive, sugar, and sugar substitutes do cause a lot of craving 

Americans can really benefit from eating Paleo, Keto, Whole 360 and implementing fasting occasionally.  Our national health cost will probably go down quite a bit.  

Since leaving offshore, my BMI had gotten up to 28.65, so last November I went on a diet of less than 2500 calories a day and doubled up on my daily walks (Shout out to some kids from school turning me on to Pokemon Go. It taps into your OCD & helps to significantly increase your daily steps. Gotta catch ‘em all.) I only eat between the hours of 11am to 7pm. I’ve also tricked myself into believing that smells are a fair proxy for tastes.

Today my BMI is 26.0 and I should be able to shave off a bit more over the summer. Weight loss is super slow at 59 yo, but I’m not in a hurry.

I’m not doing any diet in particular. Just sticking to calorie count & eating sensible / healthy foods. Fruits & PBJ’s are my go to sweets, instead of candies, cookies & cakes. I hope to maintain the 7pm to 11am fast and the walking regimen until I’m dust. Both are painless.

We eat when we’re not hungry because we’re bored or we’re missing something that food takes the place of. Fill in the emotional gaps with good stuff!

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10 minutes ago, DooDiligence said:

Since leaving offshore, my BMI had gotten up to 28.65, so last November I went on a diet of less than 2500 calories a day and doubled up on my daily walks (Shout out to some kids from school turning me on to Pokemon Go. It taps into your OCD & helps to significantly increase your daily steps. Gotta catch ‘em all.) I only eat between the hours of 11am to 7pm. I’ve also tricked myself into believing that smells are a fair proxy for tastes.

Today my BMI is 26.0 and I should be able to shave off a bit more over the summer. Weight loss is super slow at 59 yo, but I’m not in a hurry.

I’m not doing any diet in particular. Just sticking to calorie count & eating sensible / healthy foods. Fruits & PBJ’s are my go to sweets, instead of candies, cookies & cakes. I hope to maintain the 7pm to 11am fast and the walking regimen until I’m dust. Both are painless.

We eat when we’re not hungry because we’re bored or we’re missing something that food takes the place of. Fill in the emotional gaps with good stuff!

I sound really preachy.  But I have gone through the gamut of bulking up for Football, starving for wrestling, then losing a bunch, then gaining a bunch due to working from home, and then discovering IF, Keto, and generally eating low carb.  I know I am as annoying as a know-it-all.  I would just add to read the labels on package food.  Pay attention to anything that spikes insulin and how your body respond to it.  I have come off the wagon a bit lately and starting eating dessert with my kids.  But the discipline developed through IF and Keto means that my insulin is super sensitive.  I can eat quite a bit of sweets and my body just handles it.  That would not have been the case 5-10 years ago when I drank a lot of diet soda and ate much more carbs.  I would be in a food coma.  I don't think I have been in a food coma lately.  

Calories in and calories out isn't everything.  Just like investing, some calories (or earnings) are higher quality than others, i.e. berries, nuts, olive and avocado oil, fish, etc.  You know the deal.  I like to eat peanut butter with my berries.  Yay, Costco!  Watermelon is surprisingly a low carb food despite being so sweet.  Rice, noodles, pasta, bread are not quite that good for you despite it being on the bottom of the food pyramid.  I think if Americans just incorporated fasting, we can probably save a ton in healthcare spend.  But the insulin spikes and the hunger pans and the Pavlovian conditioning of reaching into a bag of chips or watching TV and snacking are hard to break.  Trust me, when food companies talk about innovation and R&D, they spend a ton of money on making snacks addictive and hard to put down.  

Okay, here goes my tin hat conspiracy theory again.  Sorry.  

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Posted (edited)
1 hour ago, BG2008 said:

I sound really preachy.  But I have gone through the gamut of bulking up for Football, starving for wrestling, then losing a bunch, then gaining a bunch due to working from home, and then discovering IF, Keto, and generally eating low carb.  I know I am as annoying as a know-it-all.  I would just add to read the labels on package food.  Pay attention to anything that spikes insulin and how your body respond to it.  I have come off the wagon a bit lately and starting eating dessert with my kids.  But the discipline developed through IF and Keto means that my insulin is super sensitive.  I can eat quite a bit of sweets and my body just handles it.  That would not have been the case 5-10 years ago when I drank a lot of diet soda and ate much more carbs.  I would be in a food coma.  I don't think I have been in a food coma lately.  

Calories in and calories out isn't everything.  Just like investing, some calories (or earnings) are higher quality than others, i.e. berries, nuts, olive and avocado oil, fish, etc.  You know the deal.  I like to eat peanut butter with my berries.  Yay, Costco!  Watermelon is surprisingly a low carb food despite being so sweet.  Rice, noodles, pasta, bread are not quite that good for you despite it being on the bottom of the food pyramid.  I think if Americans just incorporated fasting, we can probably save a ton in healthcare spend.  But the insulin spikes and the hunger pans and the Pavlovian conditioning of reaching into a bag of chips or watching TV and snacking are hard to break.  Trust me, when food companies talk about innovation and R&D, they spend a ton of money on making snacks addictive and hard to put down.  

Okay, here goes my tin hat conspiracy theory again.  Sorry.  

Agreed on paying attention to labels & the quality of food. I do a lot of high fiber & fruits & vegetables. Portions of meat that fit in the palm of my hand. I like complex carbs but keep them to a minimum since I'm not running marathons. Broke the habit of including bread with every meal & switched to half sandwiches with no ill effects.

Portion control, eating the right things & elimination of late night snacking combined with measured overall intake (calories are my analog), have been pretty successful for me & my energy levels are good.

Watermelon is really satisfying in the summer, with a fruit salad of blueberries, banana & clementines as a go to 6pm'ish snacks.

I read an article about the correlation of appetite stimulation & variety and have managed to bore my taste buds with a monotonous selection. I'm also treating food as more of a sacrament. No shoveling it in as if I'm packing a canon. Eat slow and put the fork down until your mouth is clear.

A lot of things just boil down to behavioral changes.

Back to the original topic, I'm thinking diabetes & obesity management are a good bet for 10% returns as the worlds population gains more disposable income, and NVO is my choice. I bought it in late 2016 & both the equity & the business have done well. Sure there's the risk of governmental intervention but I like it for a perma hold.

Edited by DooDiligence
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Discipline is the biggest thing for me. Then its retraining your body to get used to a new routine and portion sizing. I dont have any set diet, but rather seasonally adjust based on what I expect to eat. IE summer I expect lots of burgers and hot dogs so I try to do high fat, low carb stuff, just not religiously. Moderate portions Ive found the most important. Packing a cannon LOL is so true. I noticed that with pizza. I could eat half an everything pie in 5 minutes and when I analyze it, its cuz 5 bites clears a sliced. So chill out and break it up. Ive never paid much attention to the BMI stuff....its horribly outdated. How do you feel and how do you look and what do your annual lab results say...thats what I focus on. At my peak physical condition probably in college I was 6'0 190 with a 6 pack(good genetics, nothing of my doing LOL) which is apparently overweight. I now fluctuate between 205-215. When I start getting to the top of my range sometimes good old fashion trash talking to myself works well. "Put the 3rd piece of pizza down fatty", "Fat people shouldn't be having dessert", "Thats enough food on that plate to feed the whole family you fat fuck", "have some respect for yourself Greg".....which mentality get me back in line. 

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Posted (edited)

Good time to hit the weights hard boys. You, BG, will love it - as a former wrestler etc. It's just the ticket for you. Squats, Deadlifts, Press. Just get these 3 down, find your starting weight (for example deadlift 110lbs) - hit them 3 times per week, 5 sets of 5. You will pack on muscle like you won't believe. Building muscle is the key to growing old. "If you want to stay out of the nursing home, stay strong". Forget CrossFit, etc. When you build muscle, you transform your body mass. IF you do cardio, you lose it in about 2 weeks, then you have to start over. But, for example, when you deadlift, go up 5 lbs per WEEK. You will stay on that trajectory for 3-4 months. Take your deadlift from ,say 115 to 300lbs in 4 months. You will be amazed. You can eat what you like. You do NOT lose strength like you lose cardio. Strength stays with you MUCH, MUCH longer. Learn the big compound movements - forget the machines.  It's the only way to go when you are older.  You will feel 30 years younger, no back pain, no hip pain. Poof - gone in about 3-4 weeks. I had to do it to believe it.

Oh yeah - bonus - for investors under stress - nothing better to relieve stress than pushing iron HARD.

Edited by cubsfan
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23 hours ago, cubsfan said:

Good time to hit the weights hard boys. You, BG, will love it - as a former wrestler etc. It's just the ticket for you. Squats, Deadlifts, Press. Just get these 3 down, find your starting weight (for example deadlift 110lbs) - hit them 3 times per week, 5 sets of 5. You will pack on muscle like you won't believe. Building muscle is the key to growing old. "If you want to stay out of the nursing home, stay strong". Forget CrossFit, etc. When you build muscle, you transform your body mass. IF you do cardio, you lose it in about 2 weeks, then you have to start over. But, for example, when you deadlift, go up 5 lbs per WEEK. You will stay on that trajectory for 3-4 months. Take your deadlift from ,say 115 to 300lbs in 4 months. You will be amazed. You can eat what you like. You do NOT lose strength like you lose cardio. Strength stays with you MUCH, MUCH longer. Learn the big compound movements - forget the machines.  It's the only way to go when you are older.  You will feel 30 years younger, no back pain, no hip pain. Poof - gone in about 3-4 weeks. I had to do it to believe it.

Oh yeah - bonus - for investors under stress - nothing better to relieve stress than pushing iron HARD.

"Strong people are harder to kill than weak people and more useful in general." Mark Rippetoe

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Posted (edited)

For anyone who's posted companies that meet the criteria, thanks, I'm looking at them. 

 

Haha, wondered why so many responses on this thread finally. As a 42 yr old 6% body fat climber I've spent a lot of time on diet. 

 

Carb windows, the smaller the better for weight loss. 

Low carb, shoot for 500 carb cals a day, if your training, most of them should be post workout. Fiber doesn't count. 

For whatever reason (right brain vs left brain), it takes a long time for carb cravings to dissipate, 1-5 years. Micro biome, how poorly you count carb cals, exercise patterns etc. 

If you ate zero carbs, you could probably eat 5000 cals a day wo weight gain. Try it if you don't believe. You'll have a hard time replacing muscle glycogen though. 

Once or twice a week, grab a coffee in the morning and do 3 hours of cardio wo eating, insta-ketosis. It's easier if you do something that grabs your attention 

(dirt biking for me). I don't even notice I'm hungry until about 30 minutes post workout. 

Find a sport that is fun, and makes you strong, weights are boring as hell, but obviously they work, not sure you can maintain it for decades though. For me

that's rock climbing, local gyms everywhere now for easy beginner intro.  This is one of the biggest keys most miss imo to lifelong fitness. It's all about finding a passion, you'll probably suck for awhile, your body can do much more than your mind believes under better circumstances. eg, I took up dirt biking in 2016, crazy work out, you'd be surprised.... it's a choose your difficulty thing. 

If you increase fats alot, don't increase meats alot, go for seeds, nuts, avocados, nut butter bars, oils, etc. 

Your average, median, mode, brain power will be higher, without the highest highs unfortunately, when very low carb/sometimes keto, I'll call it. 

Eating carbs makes you hungry, the higher the glycemic response, the hungrier you'll get non linearly. You want a high glycemic response post workout only. 

All of this will reduce inflammation/accelerate recovery/improve mental acuity. As my diets improved so has my attention span. Which will help you get more of everything you want. 

 

 

 

Edited by flesh
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