In my previous two posts, I introduced the concept of fragility and also explained how to build an Antifragile portfolio. In this post, I will try to explain how to measure the fragility of a company from investors point of view using financial statement analysis using 2 to 3 key ratios.
Great article. One question: How should one value Castrol given what we know about the company (i.e. low fragility, low growth, high RoCE)? What should an entry multiple be and how should one think about it mathematically?
Thank you for the wonderful blog.. I am looking forward to learn many more things ahead. I think castrol stock has been discussed in 2 of the blogs for it's ROCE and fragility. But when we look at the stock performance It has given 300+% return since its listing and It's all time high was 7 years ago. My questions is why and what's going wrong??. It's good to invest in non-fragile company but making wealth is also very important. Thank you
Till now, in all my posts, I have covered on how to reduce downside risk by eliminating fragility. Robust is misunderstood as opposite of fragile. True opposite of fragile is antifragile. In my upcoming posts I intend to cover the upside potential aspect i.e. antifragile aspect of portfolio which enables in wealth creation. With regard to Castrol Limited, I mentioned in the post that management has been distributing majority of cash generated as dividends instead of exploring growth avenues. There may be upside potential if management starts experimenting new revenue streams and the same turn up successful.
Great write up Ram !!
Well explained.
Great article. One question: How should one value Castrol given what we know about the company (i.e. low fragility, low growth, high RoCE)? What should an entry multiple be and how should one think about it mathematically?
Thank you for the wonderful blog.. I am looking forward to learn many more things ahead. I think castrol stock has been discussed in 2 of the blogs for it's ROCE and fragility. But when we look at the stock performance It has given 300+% return since its listing and It's all time high was 7 years ago. My questions is why and what's going wrong??. It's good to invest in non-fragile company but making wealth is also very important. Thank you
Till now, in all my posts, I have covered on how to reduce downside risk by eliminating fragility. Robust is misunderstood as opposite of fragile. True opposite of fragile is antifragile. In my upcoming posts I intend to cover the upside potential aspect i.e. antifragile aspect of portfolio which enables in wealth creation. With regard to Castrol Limited, I mentioned in the post that management has been distributing majority of cash generated as dividends instead of exploring growth avenues. There may be upside potential if management starts experimenting new revenue streams and the same turn up successful.
Thank you Sir... Understood...
Nice post man..