Resonate Blends (Resonate Blends) Predictability Rank

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What is Resonate Blends Predictability Rank?

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.

Resonate Blends 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

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	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 Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-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

Resonate Blends Predictability Rank Related Terms

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Resonate Blends (Resonate Blends) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Resonate Blends Inc (OTCPK:KOAN) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

26565 Agoura Road, Suite 200, Calabasas, CA, USA, 91302

Website

https://www.resonateblends.com

Resonate Blends Inc is a cannabis/hemp-based holding company. It is focused on a vertically integrated and valued-added Wellness and Lifestyle brand.

Executives

Richard Hoge	10 percent owner	C/O JIM KEARNEY, 760 SW 9TH AVE. STE 3000, PORTLAND OR 97205
Pamela Kerwin	officer: Chief Operating Officer	26565 AGOURA ROAD, SUITE 200, CALABASAS CA 91302
Geoffrey Selzer	director, officer: Chief Executive Officer	26565 AGOURA ROAD, SUITE 200, CALABASAS CA 91302
David Thomas Thielen	10 percent owner, officer: COO	1940 CONTRA COSTA BLVD., PLEASANT HILL CA 94523
Nick Allen Miniello	10 percent owner, officer: VP of Sales	1940 CONTRA COSTA BLVD., PLEASANT HILL CA 94523
Wais Asefi	director, 10 percent owner, officer: CEO	1940 CONTRA COSTA BLVD., PLEASANT HILL CA 94523
Sterling John M Iii	director
Gregory Oliver Sargent	10 percent owner	1609 FAIRFIELD BEACH ROAD, FAIRFIELD CT 06824
Steven Richard Deerwester	officer: Vice President	3125 DARTMOUTH PLACE, CUMMING GA 30041
David G Kane	other: Controller	50 JOE LEE DRIVE, SHARPSBURG GA 30277
I Sigmund Mosley	director	945 E PACES FERRY RD, SUITE 2450, ATLANTA GA 30326
Vincent J Dooley	director	2859 PACES FERRY ROAD, SUITE 1000, ATLANTA GA 30339
Spencer John N Jr	director	2859 PACES FERRY RD, STE 1000, ATLANTA GA 30339
Marsha K Calfee	officer: VP of Product Development
Jeffrey Longoria	officer: VP of Sales