John Gutekunst is a finance professional presently working in the United States for one of the world's largest banks as an analyst in its Corporate Lending department. John is also a CFA Charterholder. With his current employer, he has prepared analytical reports that helped obtain approval for nearly $3.0BN of credit commitments for the bank since March of 2008. He has experience analyzing a broad background of companies, including both public and private entities. The companies he has been exposed to represent a variety of geographic footprints, sizes, operating histories, and risk profiles, giving John a diverse base of knowledge and experience to draw upon. Contrary to his professional background, John's true passion has always been investing in equity securities. He has had fascination with the stock market from a young age, and also has a fairly detailed understanding of the various types of economic environments and equity markets that have occurred since the 1920's. John has traded equity options and spot (retail) foreign exchange in addition to equity securities. John's preferred investment style is that of a value investor, and he is a strong proponent of value investing- particularly the margin of safety discipline taught by Benjamin Graham and David Dodd. He realizes fundamental analysis is his core competency when it comes to investing- he does not practice day trading or other strategies that rely heavily on short term technical or quantitative theories. Thus, he does not focus on the day-to-day vicissitudes of the market, but allocates his time towards identifying opportunities to make investments in a security (or other assets) at a significant discount from a reasonably appraised intrinsic value.
Friedrich is the name given to our algorithm for analyzing companies that trade on the global stock markets. In creating Friedrich we concentrated on analyzing each company’s Main Street operations through various established ratios, along with our own unique ratios that we developed over the last 30 years. What we came up with is a final "Main Street" price per share based on Generally Accepted Accounting Principles (GAAP), which is a framework of accounting standards, rules and procedures defined by the professional accounting industry, which has been adopted by nearly all publicly traded U.S. companies. We feel that our Main Street price result is what each company would need to trade at in order to be attractive to a businessperson on Main Street looking to buy at a bargain.
Since the only constant in the universe is change, the results for each company fluctuate by varying degrees. No company is an island unto itself, but each operates in a world of constant change and at times in areas where Chaos is the norm. By analyzing a company’s Main Street operations over time, Friedrich is able to give the potential investor a decade long analysis (opinion) as well as offering a Trailing Twelve Month (TTM) analysis (opinion), as well. Thus our readers will not only get as close to a real time view of operations on Main Street as is possible, but then can measure the consistency of the company’s operations over time to determine if s/he should invest or not.
Through our Friedrich algorithm we can analyze ten years of Balance Sheet, Income Statement and Cash Flow Statement data for each company all at once and generate one final result in seconds. Friedrich was designed to be ultra-conservative and thus will cut zero slack to any company under analysis and will do so with zero emotion. Companies must be exceptional in order to get an attractive Main Street valuation and the ideal investments according to our backtesting are the ones that have been consistent over time.
By being so ultra conservative Friedrich is designed to identify bargains that Wall Street investors may have overlooked. Companies shares may trade on the stock market but the companies themselves operate on Main Street, so Friedrich is designed to generate a Main Street price per share first and only then does he go to Wall Street and see the price for which Benjamin Graham’s “Mr. Market” is offering the shares.