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mrhappyasthma / IsThisStockGood

A tool for evaluating companies using the Rule #1 investing principles.
http://www.isthisstockgood.com
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Show ROIC averages instead of growth rates #34

Closed mrhappyasthma closed 3 years ago

mrhappyasthma commented 3 years ago

The initial implementation shows the ROIC growth rate, but the book recommends just looking at the averages.

This will be a more consistent experience with the valuation methods in the book.

mrhappyasthma commented 3 years ago

The problem is with this line:

https://github.com/mrhappyasthma/IsThisStockGood/blob/master/src/Morningstar.py#L89

In code we call it roic_averages but it gets assigned the calculated growth rate.

This is a problem because the delta in growth rate of ROIC is not what we care about. For instance, if a company had 1% ROIC and then next year had 2% ROIC, this would be a significant rate of change. But neither year met the 10% minimum dictated by Rule #1.

mrhappyasthma commented 3 years ago

Fixed in https://github.com/mrhappyasthma/IsThisStockGood/commit/b60a3a64b11627c8814a103635cdaa25dd71a3b4