Thought this would be a fun Sunday afternoon read.
What if I told you that a company, priced at 10x earnings and growing earnings 10%, might not be an automatically attractive investment.
I made a write-up - Earnings Growth & Extra Credit - that breaks down a 101 example of how business valuation works when reinvesting capital. The first section is a great read for anyone looking to learn more about value investing.
I also delve into other topics concerning how capex spend can impact earnings at the index level (especially in the short term). I have a lot of thread left to pull on the topic before I can make any real assessments, but this kind of lays the groundwork for some hypotheses to test out.