If I were a retail degen trying to beat the market, here's the play:
Rank all companies by two metrics:
1. Capital efficiency - Return on Tangible Capital (high to low)
2. Valuation - EV/Operating Income (low to high)
Pick the top 25 names that rank high on BOTH lists.
DCA over 5 months. Rebalance once a year. Hold for at least 4 years.
Outperforming the market becomes way more realistic with this systematic edge.
Rank all companies by two metrics:
1. Capital efficiency - Return on Tangible Capital (high to low)
2. Valuation - EV/Operating Income (low to high)
Pick the top 25 names that rank high on BOTH lists.
DCA over 5 months. Rebalance once a year. Hold for at least 4 years.
Outperforming the market becomes way more realistic with this systematic edge.