Higher Order Investing is a new kind of finance web site. We want this to be the first stop for serious investors who want to understand the real-world business performance of companies they own or are interested in. We agree with Warren Buffett's quote that "Games are won by players who focus on the playing field--not by those whose eyes are glued to the scoreboard" and hope to improve your view
of what is happening on the field. We focus on providing easy access to the most important information about the financial performance of public companies. We have started with and will maintain very different emphases than other finance web sites. While they focus on links to news interpretations, other market commentary and stock price performance information, we put companies' and portfolios' financial results front and center. We will never bury you with the noise of other people's opinions. We also provide more insight into the business performance of your portfolio than other web sites. We show you the high level financial results of your piece of each company in your portfolio. As we grow, we anticipate providing additional services such as tracking this performance with your portfolio as it changes over time. We also provide access to key calculations such as return on equity, return on tangible equity and return on assets. As we grow, we may incorporate links to useful SEC filings (10K & 10Q), a small amount of historical price data useful in evaluating a company (think historical P/E, gain/loss over time for comparison with retained earnings), and perhaps links to actual company announcements,. We will also provide additional views such as rolling multi-year summaries of key financial performance data, for example five-year P/E ratios. We will also add data for foreign stocks that are currently missing because they do not file full disclosures with the SEC. Some of our derived fields may not be familiar to all users. Notable ones include
Owner Earnings (net income - capital expenses + depreciation), which approximates cash flow. Tangible Equity (net assets - goodwill - intangibles), which approximates meaningful capital needed for the business. Retained earnings (net income - preferred and common dividends), which represents money not paid to shareholders as dividends, and instead reinvested into the business or used for stock re-purchases. Readers of Warren Buffett's letters will be familiar with the use and value of these calculations, although our calculations may be simplified and generalized compared to other uses in specific contexts. Looking up stocks and defining portfolios, everything on HOI today, is and will remain free. Once we are up and running, we will probably add advertising, hopefully in a useful and aesthetically pleasing format that does not interfere with your enjoyment of the site. As we grow, we may unobtrusively offer value-added capabilities such as more-sophisticated portfolio tracking or searches, but the core capabilities you see today will remain free. It is more of an aspirational name than a specific description of the current web site. In math and computer science, higher order functions take functions as input and generate new functions. We hope to take the information you choose to provide about how you invest and to help you invest well in the ways you prefer.
