two sound businesses, page-7

Pick,

I found myself grinning widely by the time I got to the end of your impassioned expunging of what I detect to be a degree of frustration at the Pervasiveness of the Herd Mentality.

I particularly liked " behavioural hardwiring that makes many of us dubious candidates for logical sharemarket investing - and indeed dubious candidates to run a planet".

And your distillation of investor behaviour into an anthropological force I thought was both succinct and relevant. I wish I could have expressed it in your terms.

And like you, I have always been bewildered that animal spirits fluctuate with every utterance by previous Fed chairman Greenspan, as well the current one today, Bernanke.

But you shouldn't despair; for it is precisely because "investment decisions would often be trumped longer term by unfortunate behavioural inheritances", and "for those who aren't resolute or haven't mastered compensating techniques, they tend to erode considered logical decisions over time" that disciplined, independent thinkers can profit in the equity market.

Paraphrased:
"Be Fearful When Others are Greedy and Be Greedy When Others are Fearful". (W.Buffet [I think])

In relation to your question on FCF/EV%, I'm afraid that to my knowledge no magic pudding exists that contains a ranking of stocks on this basis. It has to be derived from first principles. (It's not that hard to do; it merely requires: 1) looking at historical operating cash flows, adjusted for working capital needs, and 2) a sense of how much capital the enterprise needs to consume assuming it trades to perpetuity, aka "maintenance-", or "stay-in-business capex".)

But, certainly, no broking firms produce such a database.
(And why would they? for they are in the business of actively NOT discerning true insrinsic value; rather, they seek to be able to change investment tack at any whim, irrespective of how under- or overvalued a security happens to be...their business model depends on the mere churning of stocks. Valuation discipline on their part or on the part of their clients is an anathema the their profitability.)

Thanks again for posting an lluminating contribution.

Regards

Cameron