Difference between ROCE and ROIC and does it matter

Financial metrics and investment quality Deciphering financial ratios can be daunting for investors looking to differentiate potential investments on quality. But if you’re set on picking your own investments, then you need to be able to understand and interpret them. If there are better ways you could be spending your time, then leave it a mutual fund manager in spite of its drawbacks or even just buy a low-cost index tracker, which tends to beat most active investors anyway. When it comes to financial metrics, it’s important to understand the spirit more than the letter of the metric, i.e. what the

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The worst sector for investors

“How to become a millionaire? Make a billion dollars and buy an airline” – Richard Branson (founder: Virgin Airlines) I am not a fan of the sweeping generalization. Be it about gender “Women are not good at math”, profession “Engineers are left-brained and analytical”, geography “People from xyz are hard-working” or sport “South Africa are chokers”. To me, it represents lazy and (usually incorrect) simplification of a complex world, often done because it’s too much hard work to assess each experience. Investing has its fair share of so-called truisms. “Real Estate gives great returns”, “Gold is a sure hedge against inflation”, “Small caps outperform Large caps” and so

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Buying your first stock

Let’s say you recognize the corrosive nature of inflation, doff your hat to the marvel that is compounding and realize why equities are critical to wealth-building. Good going already. You’d now like to build your very own stock portfolio that you hope will grow your wealth manifold over the years. Fantastic! So, how do you find your first stock? Where to look One way is to flip through the pink papers or to CNBC to see what stocks the talking heads are eagerly touting as the next big thing. It is also probably the worst way. Reading the Financial Times to prepare for markets

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