Long-Term Investing: Look at ROE or PE?
Many investors have heard the idea that “long-term compounding ≈ ROE.” This concept was first put forward by Charlie Munger, known as the Munger Rule. In his 1981 shareholder letter, Warren Buffett also pointed out that if PE remains unchanged, a company with 14% ROE will generate a long-term investment compound return of 14% as well. When picking stocks for the long run, do you focus more on ROE or PE? Why? Do you think ROIC and FCF are more important than ROE in compounding? If you could only choose one metric for a 10-year investment decision, which one would it be?
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- A Holistic Look Beyond ROE or PE Might Be Good For Our Long Term Investing
A Holistic Look Beyond ROE or PE Might Be Good For Our Long Term Investing
For long-term investing, it is usually not about just one metric like ROE (Return on Equity) or P/E (Price-to-Earnings ratio). Instead, investors often look at a combination of factors to form a holistic view of a company’s quality, growth potential, and valuation. In this article, I would like to share how I would break it down: 1. Quality of the Business ROE (Return on Equity): Measures how efficiently a company uses shareholders’ money to generate profits. High and consistent ROE (say, >15%) can signal strong competitive advantages (a “moat”). ROIC (Return on Invested Capital): Similar to ROE but accounts for debt as well. Often considered a cleaner measure of management quality. Margins (Gross/Operating/Net): Strong and stable margins often point to pricing power. ROE/ROIC tell you - Dell Ups AI Target to $20B: Betting Big on GPUs
Dell Ups AI Target to $20B: Betting Big on GPUs
$Dell Technologies Inc.(DELL)$ delivered record revenue for its second fiscal quarter of 2026 (ending July 2025), with total revenue reaching $29.8 billion—a 19% year-over-year increase that exceeded market expectations. However, underlying concerns lurk behind the impressive figures: gross margin declined to 18.3% (down 2.9 percentage points year-over-year), traditional business growth remained sluggish, and explosive AI server deliveries squeezed profit margins. Despite exceeding expectations in AI order fulfillment, market skepticism persists regarding the company's sustained growth momentum and profitability quality.Performance: AI servers drive revenue growth, but structural challenges become more apparent.1. Explosive growth in AI infrastruc - For long-term investing, I look into ROE, P/E, and P/B. Example OCBC's $OCBC Bank(O39.SI)$ ROE was 12.6% in the first half of 2025, showing solid profitability. With a P/E ratio around 10.3 and a P/B of 1.25, the bank appears reasonably valued. These metrics, alongside a stable asset base, suggest a resilient and potentially attractive long-term investment. @Tiger_comments @MillionaireTiger @TigerStars @TigerEvents
- Beyond ROE and PE: Why ROIC and FCF Drive Decade-Long Returns
Beyond ROE and PE: Why ROIC and FCF Drive Decade-Long Returns
$S&P 500(.SPX)$ When it comes to building wealth through the stock market, the long-term investor’s most important tool isn’t clever market timing or exotic strategies—it’s the power of compounding. The challenge, however, is in identifying which companies can compound effectively over decades, and at what price they should be purchased. Two of the most commonly debated metrics among investors are Return on Equity (ROE) and the Price-to-Earnings (PE) ratio. Both hold critical information: ROE speaks to the intrinsic ability of a business to generate profits on shareholder capital, while PE reflects how the market values those earnings. The debate, therefore, is essentially about quality versus price. In this article, we’ll explore: The logic b - Replying to @SPOT_ON:BOTH ROE AND ROIC FOR CAPITALAND CHINA IS LOOKING FANTASTIC ! $CapLand China T(AU8U.SI)$ //@SPOT_ON:CapitaLand China Trust : Commercial C-REIT Receives Approval From China Securities Regulatory Commission To Register For Its Listing On The Shanghai Stock Exchange
