About Us

This blog should be read in conjunction with the Facebook application Model Price ™.  Facebook is great for small comments, Q&A, and links however very challenging when writing over a few hundred words.

Be prepared to read about new concepts in finance.  Stuff you never heard of before, nor find in any textbook.  Did we invent these concepts?  Yes and no.  As we have said on Facebook, we have stood on the shoulders of others for the big concepts however we enhanced, refined and constructed our own tools for looking at the world of finance.

That is why this blog exists, to teach new financial concepts, to discuss them, maybe even debate things that should be debated.  We have created a new world of finance, (yes, a bold statement) and for those willing to learn, we believe your investment knowledge will be better off.  Maybe even make some money in your investment account.

We also want to have fun!  The most fun we have is reading the financial press.  We see “effects” all the time.  A company reporting great earnings, a penny above, and the stock sells off.  Acquisitions occur, and the acquiring company’s share price gets wacked.  Why? Everything in the press or in the financial world seems to be about “effects” and NOT the “causes”.  We love “causes”.  Our world is about the math of “causes”.  Explaining the why and the how.  As you can imagine there is no shortage of material to talk about.

Our primary goal is to make transparent our in house research tool –Model Price, and editorialize about it in such a way to give a perspective that is math based, based on a theory of the economic process that relates economic activity to the economic structure of a company.  Secondarily, we want to be controversial, and shake things up and have fun doing it.

We’ve had a suggestion of reprinting “About Us” from the Facebook application here in the blog, to help those who don’t want to go on Facebook, and to give context on the charts we are inserting in this blog.

About Us (From Facebook)Model Price ™ is a valuation model application designed to aid investors in profitable security selection. Model Price ™ is about the collection of third party data, running this data through our algorithms, and producing economic book values (EBV) and model price for a database of 2000 or so securities – both US and Canadian companies.  We collect quarterly balance sheet data, if available, last trade (4 o’clock close) price, and input applicable interest rates on a nightly basis.  This new data, along with our algorithms, is processed nightly, starting around 4:30 pm eastern.  The new output, updated charts including the day’s new information, is produced around 6:00 pm eastern.  Users can tell the new data has been calculated by looking at the calendar on the right column of the application.  If the calendar highlights the current day’s date, then the calculations have been completed.  Sophisticated users can also tell by the current day’s close also on the company’s chart.There is famously NO opinion on our charts.  Model Price™ only performs the calculations, stores data, and oversees the integrity of the process.  Opinions come from our users, who can use Facebook ™ as a platform for their comments.

Errors do occur from time to time.  With so many securities, and daily data inputted, it is impossible for Model Price™ to catch every conceivable error.  Please draw our attention to any error by using the Facebook™ Wall for notification.  Errors can usually be spotted immediately when our EBV lines jump, up or down, for no apparent reason.  Also, if a company has no model price, by way of an error, a pop up window will appear.

Model Price™ works best on large capitalized equities.  We use published consensus earnings forecasts for our model price calculation.  We also grow the balance sheet on a daily basis, between reported quarterly financial statements, to grow our EBV lines.  Obviously, the more reliable analyst estimates’ are the more confidence a user can have on model price and the EBV trading bands.  A selected equity with only one analyst estimate will have restricted information value.

Model Price ™ is maintained at the offices of Acker Finley Inc.  Acker Finley Inc. is a Canadian investment dealer registered with the Investment Industry Regulatory Organization of Canada (IIROC).  Acker Finley Asset Management Inc. a related company is a Canadian registered portfolio manager and Investment fund manager.

12 responses to “About Us

  1. Rod Lukey June 1, 2012 at 9:09 pm

    Brian, I see that many of the pipelines you have model prices for are currently overvalued. I am currently interested in and researching Inter Pipeline Fund IPL; would like to see what your model price indicates for that stock. It is not available on your Facebook App. Would you please provide some insight? Thanks…Rod L

    • ModelPrice Guy June 2, 2012 at 8:17 am

      Thanks Rod.
      We do have Inter Pipeline fund in our database. IPL_U is the symbol. Try our name search next time on our Facebook app. I have tested the name search for IPL and it worked. Though I don’t recommend stocks I would stay clear of IPL.
      Reasons:
      1. Valuation high over the last 14 years.
      2. Pays out $1.05 in dividends, with a mean earnings estimate of $1.06 for Fiscal December 2012.
      3. Though we don’t indicate this ratio on our charts, we do give you the formula with regards to solvency (see Key Concepts). IPL_U has a solvency ratio of 0.44 on the March quarter balance sheet. As a rule of thumb I don’t invest in any company that has a solvency ratio under 0.50.

      So you have a company that is highly valued, highly leveraged and paying out every dime they make in dividends. Certainly no margin of error. If anything were to go wrong, I think you know what I mean!

  2. haowenwu August 18, 2013 at 12:33 am

    Hi I am just wondering if there is a non-fb based app? Not everyone has a fb account…

    • ModelPrice Guy August 18, 2013 at 7:20 pm

      Make up a name and log on…its simple! We have taken two years to program the Facebook platform which is the most versatile for our work. Plus we have a mobile version which Facebook will support…Give it a try!

  3. Pat February 28, 2014 at 11:28 am

    View by levels
    What does this mean?
    There are levels 1,2, 3 , and 4

    • ModelPrice Guy February 28, 2014 at 11:55 am

      Yes Pat, each of my blogs has a level from 1 to 4. “1” being simple to understand, with 4 or IV being a high knowledge of Model Price Theory (MPT) is needed. Hope this helps.

    • ModelPrice Guy March 17, 2014 at 10:02 am

      Levels of difficultly or understanding. Level 4, I use a mixture of ‘Key Concepts’ to make my point. Level 1, represents no knowledge of Model Price Theory (MPT) or very little. You can start off and read all Level 1’s for instance and work your way up to Level 4.
      By seeing the Level on the blog you can judge the level of difficulty before reading.

  4. AJ Lister June 18, 2014 at 3:43 pm

    I like your model price concept and theory but darned if I’m going to sign up to Facebook just to have a look. I’m not sure what the upside is for you in only having Facebook users able to access the app (I suppose you get some sort of metrics from them), but, as I see it, there is minimal upside and considerable risk for me. By nature I’m a private person and I do what I can to stay that way. Thanks for the blog – it’s good reading.

  5. Henry Martin September 17, 2014 at 6:18 pm

    Brian,

    I am trying to figure out what your EBV’s indicate. I found the definition of EBV, however I don’t know what EBV+1, Ebv+2 etc mean or indicate. Is it possible to give a quick explanation on them.
    I really enjoy when you are on BNN.
    Thank you.

    • ModelPrice Guy September 17, 2014 at 9:02 pm

      Sure. First we start with our ‘Green Line’ or EBV. This comes directly from the balance sheet and it’s accounting book value per share plus Theoretical Earnings [TE] per share added together. (see my definition of TE under ‘Key Concepts’)Then we have selected mathematical constants derived directly from Model Price Theory [MPT] and establish lines EBV-3 to EBV+10. These mathematical constants are very complex and hard to explain so I don’t. If your new to our Model Price work stock prices will conform to these EBV lines and when a transit does occur to a new zone stock prices will conform to this new zone. Hard to believe I know but they do. Hope this helps.

  6. Dianne Watson Jarrett September 10, 2015 at 4:18 pm

    Brian,
    I tried to search companies on your Model Price App on facebook but I can’t get the company to come up. It defaults back to the first company listed alphabetically. Am I doing something wrong?
    Your blog and and concepts are very interesting. Would like to learn more.

    • ModelPrice Guy September 10, 2015 at 7:43 pm

      Thanks Dianne….your probably using a Mac. There is a bug in the iOS. Open Safari and go to Preferences. Click on Privacy and click on “Allow Cookies”. Go to Model Price app on Facebook and the companies you are interested in should come up. Once working, you can go back and click on “Don’t allow cookies” on your Privacy setting. Our app doesn’t use cookies so don’t worry about that. This is a bug in Apple’s iOS. Hope you enjoy our app and please ask any question you may have, especially in the Community Comments.

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