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California First Leasing (California First Leasing) Predictability Rank


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What is California First Leasing Predictability Rank?

1 (5)

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

California First Leasing Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%1.1%3.1%


















For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-Star (non-predictable)Average among all
% Out of All 2403 Stocks 3.3% 2.9% 3.7% 3.3% 3.3% 3.7% 3.3% 76.3% 100%
% that are in Loss (10y) 3% 10% 8% 9% 11% 18% 16% 45% 37%
Average Gain (10y) 364.6% 330.9% 278.0% 235.1% 243.5% 227.8% 154.8% 100.0% 138.1%
Median Gain (10y) 238.5% 193.5% 171.0% 159.0% 132.5% 113.5% 87.0% 13.0% 39.0%
Maximum Gainer 2228.0% 2547.0% 2452.0% 2852.0% 2432.0% 1892.0% 1807.0% 11483.0% 11483.0%
Maximum Loser -82.0% -53.0% -67.0% -100.0% -83.0% -100.0% -78.0% -100.0% -100.0%
Annualized Average Gain 15.4% 14.6% 13.2% 12.0% 12.2% 11.7% 9.1% 6.7% 8.4%
Annualized Median Gain 12.1% 10.6% 9.8% 9.3% 8.2% 7.3% 6.0% 1.1% 3.1%
















For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

Also read:

Part II: What worked in the market from 1998-2008? Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety

California First Leasing Predictability Rank Related Terms

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California First Leasing (California First Leasing) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Financial Services » Credit Services » California First Leasing Corp (OTCPK:CFNB) » Definitions » Predictability Rank
Comparable Companies
CPSS XYF MFIN PMTS OPRT RM LX OPFI NICK FOA V MA AXP PYPL COF BOM:500034 IST:QNBFL DFS BOM:543257 SYF
Traded in Other Exchanges
N/A
Address
5000 Birch Street, Suite 500, Newport Beach, CA, USA, 92660
Website
https://www.calfirstlease.com
California First Leasing Corp focuses on leasing and financing capital assets, commercial loans secured by equipment and developing an investment portfolio of equity securities.
Executives
Michael H Lowry director
Robert Winton Kelley director 5000 BIRCH STREET, SUITE 500, NEWPORT BEACH CA 92660-8142
Robert A Hodgson officer: Sr. VP Tax & Accounting 18201 VON KARMAN AVE. #800, IRVINE CA 92612
Bedros Aharonyan officer: President, Cal First Natl Bank CALIFORNIA FIRST NATIONAL BANK, 18201 VON KARMAN AVENUE, IRVINE CA 92651
Michael L Mcclendon officer: SVP Credit of CalFirst Leasing CALIFORNIA FIRST LEASING CORPORATION, 18201 VON KARMAN AVENUE, IRVINE CA 92651
Glen T Tsuma director, 10 percent owner, officer: CHief Operating Officer 18201 VON KARMAN AVE, SUITE 800, IRVINE CA 92612
Danilo Cacciamatta director
Harris Ravine director 8475 GREENWOOD DRIVE, NIWOT CO 80503
S Leslie Jewett officer: Chief Financial Officer 18201 VON KARMAN AVENUE, IRVINE CA 92612
Patrick E Paddon director, 10 percent owner, officer: Chief Executive Officer 18201 VON KARMAN AVENUE, IRVINE CA 92612