Saw this post by @invesquotes
on Giverny Letters. I really liked the owner earnings part of these letters, to that end decided to take a stab at replicating it myself for my own portfolio as shown below
Unsurprisingly massively skewed to multiple expansion at the moment. Note: Using Aus Fin. yr
2020, just started and nothing reported.
2021, ZIGExN & AFL saw earnings declines more than offset KPG, market return driven by ~3.5x in KPG where it was a very large weighting
Value 2022, Everythng did great on earnings, market contracted on me
Value 2023, Nothing has reported yet, just divs
Some stocks i own have negative WC cycles and/or reinvesting a lot into deductible expenses so the use of EPS may be a short term detractor on longer term value potential. But still use stat EPS just to keep things simple and clean, also don't want to adjust things to fool myself
Longer term I expect these to converge a bit, but I am privy to expecting aggressive multiple expansion and am not by any means a never sell investor, so I expect a gap to persist, and ideally a fairly large positive gap as there is currently as i purchase at steep discounts to intrinsic value and sell beyond it.