blog

Geasphere Case Study

Price to Free Cash Flow Investment Model Empirical Data: 1950-2009

The GeaSphere Price to Free Cash Flow (PFCF) research study is the foundation of our stock picking philosophy.

Our GeaSphere (PFCF) Dow Portfolio was vigorously back tested from the years 1950 to 2009 by exclusively using the stocks in the Dow Jones Industrial Average (DJIA) that met our proprietary free cash flow philosophy.

We invested $10,000 in two separate portfolios, where one represented the entire Dow Jones (DJIA) and the other represented only the stocks in the Dow Jones (DJIA) that met our strict GeaSphere (PFCF) criteria.

Using standard back testing methods, we purchased each portfolio on the first trading day of each year and sold the entire portfolio on the last trading day of the year, recording the performance results for each portfolio.

We repeated the process from 1950 to 2009.

Our (PFCF) valuation system compares company’s current and past market price to the multiple investors are willing to pay for its annual free cash flow. Our research philosophy identifies stocks that are undervalued or overvalued before the market re-prices them.

Our research study posted average annual returns for the Dow Jones Industrial Average of 6.77% accumulating a total value of $511,469 from the original $10,000 invested.

In comparison the GeaSphere (PFCF) Dow Portfolio produced an average annual return of 21.08% for a total value of $965,001,511 from the original $10,000 invested.

The GeaSphere (PFCF) Dow Portfolio outperformed the Dow Jones Industrial Average by 188,700 percent.

GeaSphere: Research Study

Part 1:

The side by side comparison of the GeaSphere (PFCF) Dow performance vs. that of the Dow Jones Industrial Average (DJIA) index performance.

Part 2:

Purchases made using the GeaSphere (PFCF) Dow for the years 1950-2009. We represent the performance of each purchase evaluated retrospectively.

Part 3:

The components of the DJIA for each year. Since the components were similar for many consecutive years, we posted the updated DJIA list only in those years where changes were made to the index.

Part 4:

Yearly side-by-side cumulative performance of the GeaSphere (PFCF) Dow vs. that of the DJIA index in actual dollars starting with $10,000 in each portfolio on January 1, 1950, and ending December 31, 2009.