We're living in uncertain times... I'll spare you the list of bad things happening in the world right now.

Channeling Warren Buffett's Not-So-Secret Edge By Marc Gerstein, director of research, Chaikin Analytics We're living in uncertain times... I'll spare you the list of bad things happening in the world right now. Unless you live under a rock, you know it's tough out there. There's no getting around that reality. And that's why now, more than ever, it's critical to make the right moves as an investor. So to help us do that today, we're turning to one of the greatest financial minds of all time – Warren Buffett. Importantly, we'll see that Buffett's long-term success isn't due to what many folks might think about him at first. But with that said, he does have a not-so-secret edge...   Recommended Links: The Biggest Commodity Bull Market in History? "Commodities will be THE trade of the coming decade," says the senior analyst behind 24 triple-digit winning recommendations. Not just because they're among the best ways to BEAT out-of-control inflation... but because they're at the beginning stages of a massive cycle... one that could hand you quadruple-digit gains if you get in now. He details his No. 1 favorite commodity play, right here. Buy This Oil Stock BEFORE Russia's Next Move Stocks are plummeting after Russia's invasion of Ukraine. The shutdown of a major energy pipeline to Russia could create a historic shock in oil prices and send oil stocks soaring. But do NOT buy Chevron or ExxonMobil. Instead, this small Texas oil stock could make you 100%-plus if you get in immediately, before the oil crisis escalates. Click here for the full details. You see, most folks think "value investor" when they hear about Buffett. And they might think next about a classic, widely used measure of value – a low price-to-earnings (P/E) ratio. But this line of thinking isn't quite right... After all, a company with a low P/E ratio isn't necessarily a good value. It could simply have no earnings and a low share price. In fact, the P/E ratio only measures the market's price on the company's earnings. It doesn't tell you anything about how skilled the management team is at making money. That may sound obvious. But understanding that distinction is the key to following in Buffett's successful footsteps. Fortunately, Buffett released his latest Berkshire Hathaway (BRK-B) shareholder letter at the end of last month. It's a masterclass in this idea. And we can use it to reveal his not-so-secret edge... To understand what kinds of companies fit Buffett's formula, look at Berkshire's largest investments at the end of 2021. These holdings include Apple (AAPL), Coca-Cola (KO), Bank of America (BAC), and more. (You can find the full list on page 7 of his shareholder letter). Given Buffett's reputation as a great value investor, we might expect these companies to have low P/E ratios. Or maybe they all have low price-to-sales (P/S) ratios, which is another common valuation metric. But... they don't. The median P/E and P/S ratios for Berkshire's holdings within our Chaikin Analytics database are currently 16.5 and 4.4, respectively. That's roughly in line with the benchmark S&P 500 Index. Its median P/E and P/S ratios are currently 17.2 and 4.2, respectively. Of course, as we've discussed before, valuation ratios and growth rates are closely related. Paying the same price for faster growth would satisfy a value investor, too. So perhaps Berkshire's holdings exhibit superior growth rates. Nope... they don't. The median five-year, earnings-per-share growth rate for Berkshire's major investments is around 11%. In comparison, this metric equals roughly 13% for the S&P 500. In other words, Berkshire's holdings haven't been growing as fast as S&P 500 companies. Here's the reveal... Company quality is the key to Buffett-ology. Buffett wants to be able to look at a business today and know it will still be there – and still be strong – well into the future. After all, his favorite holding period is said to be "forever." Bad quarters now and then are acceptable. That's life. That's business. The important thing is that these companies will still be thriving for years to come. These companies are the so-called "inevitables." Inevitable companies leave data footprints that help us recognize them... The best metric for identifying an inevitable company is return on equity ("ROE"). That's where we can see Buffett's advantage, too... The median five-year average ROE for Berkshire's major investments is currently about 25%. For the S&P 500, it's roughly 14%. Strong operating margins provide additional clues. The five-year average margin for Berkshire's major investments is 23%, compared with 17% for the S&P 500. The importance of company quality to stock valuation is often underappreciated. But the market's experience with quality in action can be clear and bold...  Buffett's long, successful career is one clear-cut example. Failing to appreciate quality's role in investing can scare folks out of great, Buffett-like ideas. But as the future becomes more precarious, that's the last thing anybody needs. Good investing, Marc Gerstein Market View Major Indexes and Notable Sectors     # Hld:     Bullish     Neutral     Bearish Dow 30 -2.37% 6 21 3 S&P 500 -2.91% 79 346 71 Nasdaq -3.69% 9 70 20 Small Caps -2.46% 211 1128 530 Bonds -0.76% Energy +1.48% 17 2 0 — According to the Chaikin Power Bar, Small Cap stocks are more Bearish than Large Cap stocks. Major indexes are mixed. *  *  *  * Top Movers Gainers SLB +8.12% HAL +6.18% NEE +4.95% CF +4.87% NEM +4.81% Losers PVH -15.37% UAL -15.01% FTNT -13.14% DAL -12.78% LYV -12.30% *  *  *  * Earnings Report Reporting Today Rating Before Open After Close DKS LFUS WOOF CASY, DV, GWRE, MDB No earnings reporting today. Earnings Surprises CIEN Ciena Corporation Q1 $0.47 Beat by $0.02 *  *  *  * Sector Tracker Sector movement over the last 5 days Energy +8.16% Utilities +5.71% Real Estate +1.66% Health Care +0.25% Staples -0.55% Industrials -2.19% Materials -3.84% Communication -6.09% Information Technology -6.36% Financial -6.85% Discretionary -8.03% *  *  *  * Industry Focus Oil & Gas Exploration & Production Services 39 17 2 Over the past 6 months, the Oil & Gas Exploration & Production subsector (XOP) has outperformed the S&P 500 by +52.52%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #2 of 21 subsectors and has moved up 2 slots over the past week. Top Stocks WLL Whiting Petroleum Co VLO Valero Energy Corpor PSX Phillips 66 *  *  *  * Chaikin Analytics LLC is not registered as a securities broker-dealer or advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Chaikin Analytics does not recommend the purchase of any stock or advise on the suitability of any trade. The information presented is generic in nature and is not to be construed as an endorsement, recommendation, advice or any offer or solicitation to buy or sell securities or any kind, but solely as information requiring further research as to suitability, accuracy and appropriateness. Users bear sole responsibility for their own stock research and decisions. Read the full disclaimer at https://www.chaikinanalytics.com/disclaimer. You have received this e-mail because you subscribed to PowerFeed, published by Chaikin Analytics. To stop receiving PowerFeed daily, click to unsubscribe. 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