Glossary

The purpose of this glossary is to provide definitions — and links for further exploration — of topics and terminology that may be somewhat unique to Manifest Investing. We don’t try and include every financial term known to man although a few are included here because they’re at the “core” of what we do and use. If you’re searching for a definition and don’t find it here, we’d encourage you to try Investopedia.com or InvestorWords.com . If you see a word or phrase commonly used at Manifest Investing and you feel that it should be included here, please send your suggestion to manifest@manifestinvesting.com .

( A B C D E F G I L M P Q R S T V W Z )

A

ACE: (Analysts Consensus Estimate) Most commonly applied to consensus estimates of EPS growth published by services such as Zack’s or finance.yahoo.com > Analyst Estimates is a good source of EPS growth estimates. The size of the company and the number of analysts covering it will dictate the size of the pool for derivation of the estimate.

ADR: (American Depository Receipt) A certificate issued by a U.S. bank representing a specific number of shares in a foreign stock that is traded on a U.S. exchange. more

Advantage Threshold: Also referred to as "performance margin." The difference between your target PAR and MIPAR at any time. A conservative investor will have a lower advantage threshold than a risk-tolerant investor with a long time horizon. If investing causes some loss of sleep, investors should lower the threshold, perhaps to 1-2 percentage points. For many investors, a 5 percentage point design threshold is appropriate, targeting a 15% overall portfolio PAR when MIPAR is 10%.

B

Balance Sheet: A financial statement (snapshot) displaying the amount and nature of assets, liabilities and capital as of a specific date.

Book Value: The asset value per share based on the balance sheet. It is the total assets less liabilities and preferred stock, divided by the number of shares outstanding.

C

CAPS: CAPS is a stock picking community sponsored by the Motley Fools. The premise is simple: Working together, we can improve our investing results. This service pools the resources of the Foolish Community to help you to identify the best stocks at the best times to buy them — and which stocks to avoid, too. more

CASPI Rating: (CAPS All-Star Performance Index) The participants at CAPS predict whether stocks will outperform and under-perform the S500. Players are scored and ranked. The top 20% of all players are dubbed All-Stars. We track the number of All-Star outperform ratings vs. under-perform ratings to form the CASPI rating. more

Chronicle: A historical profile of split-adjusted stock price, projected annual return (PAR) and quality rating for a series of periodic "snapshots." The long-term trends for the key characteristics can be viewed for many companies — some over periods of ten years or more. The chronicle for any company can be found by clicking on Stocks in the navigation bar, entering a ticker, and scrolling down past the income statement summary. more

Combination Rating: Also referred to as "combo rating," a combination of PAR and quality characteristics into a single metric. MANIFEST has used (QR/2 +PAR*200) to generate a rating which accounts for both of the primary characteristics. The current combination rating includes an "influence" from the CAPS rating and penalizes companies with exorbitant PAR forecasts.

Conditioned: Refers to forming different judgements about a forecast, developing expectations which are different than those suggested by analysts during a study.

Critical Mass: The state where an investor has sufficient total assets to generate enough current income to fund their desired lifestyle and living expenses.

D

Dashboard: A display of a portfolio that focuses attention on a few key design attributes that are important for portfolio management. more

E

EAGLE: (Equity Analysis Guide to Long-term Expectations) Manifest's income statement-based analysis of key components used to develop a projected annual return for any stock. more

EPS Stability: A ranking of the average annual variability in EPS growth for all stocks in the Solomon database. The figure ranges from 0-to-100, from least consistent to most consistent EPS growth track records. more

Extended Coverage: An asterisk (*) after a company name denotes companies covered by Manifest that are not included in the Value Line Standard Edition. They're either not covered by VL or they're included in the Small/Mid-Cap Edition. We make this distinction because so many subscribers are either avid users or subscribers to the Value Line Investment Survey.

F

Financial Strength: A ranking or index of financial strength based on grades assigned by Morningstar, Standard & Poor's, Value Line and others. Financial Strength is a measure of the company's financial condition and takes into account a lot of the same information used by major credit agencies, for example, net income, cash flow, outstanding debt and the outlook for profit. more

G

Groundhog Challenge: Stock-picking and portfolio management demonstration in the form of an annual (but perpetual) contest. All Groundhog days will serve as milestones going forward in this long-term demonstration. John Kimmel is the reigning 2016 champion. Previous champions: Anna Gombar (2015),Hugh McManus (2014), Andy Pagorek (2013), Bernie Meister (2012), Nick Stratigos (2011), Anne Manning (2010), Paul Witt (2009), Mark Robertson (2008) and Steve Parham (2007). The Bower City Ladies of Janesville WI (2016 and 2008) are the reigning 2016 group champions. Previous group champions: Broad Assets of St. Louis (2012-2013,2015), Serious of Pittsburgh (2014), Northern Traders of Traverse City MI (2011), Wolves of Flint MI (2010), Two Rivers of San Diego (2009), Crow River of Minneapolis (2008). See: "Groundhog Scoreboard":https://www.manifestinvesting.com/groundhog_scoreboard/2015 more

Groundhog Day: National, even world-wide, holiday for all things Manifest. Manifest Investing was formed on February 2, 2005.

Growth: Unless otherwise specified, any growth designation refers to sales (or top line) growth forecasts for all companies. An exception is made for any asset-based financial sector company where "growth" refers to the increase over time in book value.

I

Income Statement: A financial report that reflects revenues and expenses to show the net profit or loss over a specified accounting period. Manifest uses the concept of a 5-year expected income statement to form forecast stock prices and projected annual returns.

L

Lemmings: A reference to the herd behavior of Wall Street traders and “investors.” See Rhino.

M

Manifest: To show or demonstrate plainly; a list … according to owner and location. To make something clearly apparent to the sight or understanding; obvious. We believe that the two most important characteristics of any investment are its expected returns over a long-term time horizon and its quality. We believe that these two characteristics can be applied to any stock or fund and that they form the foundation of understanding for optimizing portfolio design and management. more

Manifest Rank: A 0-to-100 ranking of all the combination ratings (a blend of return forecast, projected annual return, and quality ranking) in the Solomon database. For example, a company with a combination rank of 100 is in the top percentile for all 2500+ stocks covered at MANIFEST and would be deemed worthy of further study. This characteristic is available in the StockSearch.

Manifest Top 40: The 40 most widely-followed stocks on all subscriber dashboards at Manifest, revised and updated quarterly.

MIPAR: The median projected annual return (PAR) for all stocks followed by MANIFEST. more

P

PAR: (Projected Annual Return) PAR is the sum of the forecast price appreciation (annualized) and the projected dividend yield. Price appreciation is, quite simply, the annualized change between the current price and a projected price. (We ALWAYS use five years as the time horizon.) The future price is projected based on current sales, a sales growth forecast, projected net margins and average P/E ratios. more

Preferred Procedure: Our implementation of George Nicholson's income statement-based method of generating a 5-year EPS forecast. Also known as an Expected Income Statement. more

Q

Quality: A measure of the excellence that characterizes a company in the marketplace. The Manifest quality ranking (ranging from 0-to-100) is built from four major characteristics used in the quality rating: financial strength, earnings stability, relative sales growth and relative profitability. more

Quality Ranking: A percentile ranking of the quality rating for a given company or fund. A quality ranking greater than 80 is deemed to be excellent. We consider any company with a quality ranking between 60-80 to be “Good” and a company with a quality ranking less than 20 — in the lowest 20 percent of all companies — to be “Poor.” more

Quality Rating: The quality rating for any company ranges from 0-to-100. The 100 point scale includes four factors: Relative Sales Growth Forecast, Relative Profitability Forecast, Financial Strength and Earnings Stability. The sum of these four values on the Equity Analysis Guide provide the rating for a given company. The ratings are then ranked against each other to provide the quality ranking for a company. more

R

Relative Growth: A comparison of the sales growth forecast to the industry average — used to calculate the quality rating.

Relative Profitability: A comparison of the projected net margin (or ROE for most financial sector companies) to the average industry profitability — used to calculate the quality rating.

Relative Return: The difference between an annualized rate of return for an investment or portfolio versus what would have been achieved by investing in a suitable benchmark. If your portfolio gains 14% (annualized) while the total stock market advances 11% — you would have a relative return of 3%.

Return-on-Equity: (ROE) Manifest uses book value and ROE for all financial sector companies. ROE is the net income (EPS) divided by book value (per share.) ROE measures how much profit a company generates with the money shareholders have invested.

Rhino: A reference to the land speed capabilities of rhinos and their limited field of vision. A reference to the general behavior of the Wall Street “investing” herds. more

S

Sectors: Manifest uses the ten sectors as classified by the Global Industrial Classification Standards — (Consumer) Discretionary, Energy, Financials, Healthcare, Industrials, Materials, (Consumer) Staples, (Information) Technology, Telecommunications, Utilities.

Solomon: The database of 2700+ companies used at Manifest Investing.

Solomon’s Select: Manifest's monthly e-newsletter column intended to feature a promising company for further study.

SSG: (NAIC Stock Selection Guide) A tool used by the NAIC investors to guide their fundamental analysis of a company. The form prompts an analysis of historical trends for sales, earnings and P/E ratios in an effort to guide buying and selling decisions.

Sweet Spot: Refers to a range of acceptable returns greater than the median return for all stocks. The difference between an investor’s minimum sweet spot PAR and MIPAR is based upon risk tolerance and time horizon. For most investors, a sweet spot 5-10 percentage points greater than MIPAR is a good starting point. more

T

Tin Cup: A model portfolio based on a maximum 401(k) deposit made monthly since 1995. Portfolio decisions are shared monthly in the Expected Returns e-newsletter. The model portfolio was introduced and described in the first few editions of the newsletter.

Total Stock Market: Manifest generally refers to the Wilshire 5000 index as the "total stock market" and will often use the Vanguard Total Stock Market Index (VTSMX) for performance monitoring and benchmarking.

V

Value Line Arithmetic Average: A benchmark (index) that delivers more emphasis on a distribution of slower (large) and faster-growing (small) companies. more

VLMAP: (Value Line Median Appreciation Projection) Based on the median 3-5 year price appreciation forecast for all 1700 companies in the Value Line standard edition.

W

Windshield: Consistent with the travel, journey and vehicle story line, we consider forward-looking estimates available from analyst consensus to provide effective displays of what the road ahead holds. If we believe stock price follows EPS (and it does) then this information is crucial to understanding stock price expectations. more

Z

Zebra: A reference to smaller companies, inspired by Ralph Wanger's Zebras in Lion Country and his career as one of the best small company stock pickers in history as manager of the Acorn Fund.