🔍 SharpFokus Brief – Back to the Future
July 2, 2025
In 1955, Merrill Lynch ran a famous ad that changed everything.
Titled “What kind of world will your children live in?”, it urged Americans to invest in companies — not for speculation, but to share in real business earnings.
It explained how company profits (earnings) could be measured as a percentage of share price, giving a return just like interest on savings.
This earnings yield approach helped Merrill Lynch bring in millions of new clients — and transformed Wall Street.
But since then, the message has flipped.
🔄 Earnings yields were turned into P/E ratios — shifting focus from what a company actually earns today to what it might earn in the future.
💸 At the same time, accounting moved from cash to profit, even though only cash can fund dividends or reinvestment.
⸻
SharpFokus flips it back.
✅ We track cashflow — the real money a company generates.
✅ We compare it to total assets, not share price — just like a business owner would.
✅ That’s your real return — Cashflow Return on Assets (CFROA).
No stories. No hype. Just what the business is actually doing with its capital.
Want to see which companies are generating real returns?
📈 We track them.
🔍 We highlight mismatches between cash returns and market pricing.
💡 We help you think like an owner, not a trader.
👉 Subscribe now: sharpfokus.com/subscribe
July 2, 2025
In 1955, Merrill Lynch ran a famous ad that changed everything.
Titled “What kind of world will your children live in?”, it urged Americans to invest in companies — not for speculation, but to share in real business earnings.
It explained how company profits (earnings) could be measured as a percentage of share price, giving a return just like interest on savings.
This earnings yield approach helped Merrill Lynch bring in millions of new clients — and transformed Wall Street.
But since then, the message has flipped.
🔄 Earnings yields were turned into P/E ratios — shifting focus from what a company actually earns today to what it might earn in the future.
💸 At the same time, accounting moved from cash to profit, even though only cash can fund dividends or reinvestment.
⸻
SharpFokus flips it back.
✅ We track cashflow — the real money a company generates.
✅ We compare it to total assets, not share price — just like a business owner would.
✅ That’s your real return — Cashflow Return on Assets (CFROA).
No stories. No hype. Just what the business is actually doing with its capital.
Want to see which companies are generating real returns?
📈 We track them.
🔍 We highlight mismatches between cash returns and market pricing.
💡 We help you think like an owner, not a trader.
👉 Subscribe now: sharpfokus.com/subscribe