Whale Stock Formula - Quiz

Lesson 6 – Whale Stock Formula

1 / 20

What does the Seven-Step Investment Formula combine to identify great business investments?

Economic and statistical analysis

Fundamental and technical analysis

Market and business analysis

SWOT and PESTEL analysis

2 / 20

What is the first step in the Seven-Step Investment Formula?

Checking for increasing sales revenue, earnings, and cash flow

Assessing the company’s future growth rate

Examining the company’s competitive advantage

Considering the company’s return on equity

3 / 20

What does a high and consistent return on equity indicate?

Increasing sales revenue

High debt ratio

Competitive advantage

High future growth rate

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Which company’s earnings are used as an example of consistency despite setbacks?

Google

Tesla

Johnson and Johnson

Amazon

5 / 20

What is the importance of a company having conservative debt?

It increases the company’s market value

It indicates a high return on equity

It helps to avoid the risk of bankruptcy

It indicates an increasing sales revenue

6 / 20

In the second category of the Seven-Step Investment Formula, what do we consider?

The company’s future growth rate

The right time to invest

The company’s sustainable competitive advantage

The company’s increasing sales revenue, earnings, and cash flow

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When is it ideal to enter a buy order according to the formula?

When the stock price is high

When the stock price is near or below its fair value

When the stock price is on a downtrend

When the stock price is on an uptrend

8 / 20

What is not considered a sustainable competitive advantage?

High barriers to entry

Technology alone

Economies of scale

Brand monopoly

9 / 20

What is a company’s Return on Equity (ROE) calculated by?

Dividing net income after tax by shareholders’ equity

Dividing total assets by total liabilities

Dividing net income by total assets

Dividing gross profit by net sales

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What percentage of your portfolio should be allocated to risky businesses?

50 percent

30 percent

20 percent

10 percent

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When is the ideal time to enter the market?

When the wins (profits) are high

When the market is volatile

When the market is on a downtrend

When the market is on an uptrend

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In assessing a company’s future growth rate, which growth rate indicates an upward trajectory?

Positive, preferably in double digits

Negative, preferably in double digits

Zero

Constant, preferably in single digits

13 / 20

What is the significance of a company’s debt to equity ratio falling over the last five years?

It indicates a high return on equity

It signals a reduction in risk

It shows an increasing sales revenue

It signifies a decline in market value

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Which financial website is suggested for assessing a company’s future growth rate?

Finvis

Yahoo Finance

Bloomberg

MarketWatch

15 / 20

What is a key indicator of a company’s competitive advantage?

Low net profit margin

Decreasing sales revenue

High gross and net profit margins

High liabilities

16 / 20

What does an economic moat refer to?

A company’s financial strength

A company’s increasing sales revenue

A company’s sustainable competitive advantage

A company’s high return on equity

17 / 20

When should you avoid buying a stock according to the Seven-Step Investment Formula?

At the high of an uptrend

During temporary retracements

On dips on the uptrend

On breakouts into new uptrends

18 / 20

What is dollar cost averaging suggested for?

To avoid risk of bankruptcy

To get a good average price while considering favorable technicals

To ensure a high return on equity

To increase sales revenue

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What do companies with economies of scale, such as Amazon and ExxonMobil, have?

A competitive disadvantage

A financial risk

A competitive advantage

A high debt to equity ratio

20 / 20

Which company is mentioned as an example of high barriers to entry?

Facebook

Tesla

Boeing

Johnson and Johnson

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