According to @QCompounding, focusing on Owner's Earnings removes short-term market noise and reveals a truer picture of long-term profitability for clearer trading decisions, source: @QCompounding on X on Jan 10, 2026. Owner's Earnings is defined by Warren Buffett as reported earnings plus non-cash charges less required maintenance capital expenditures, a cash-based metric that underpins intrinsic value and supports computing an Owner's Earnings yield for equity screening and valuation during volatility, source: Berkshire Hathaway 1986 and 1992 Shareholder Letters.

According to @QCompounding, Warren Buffett estimates intrinsic value by prioritizing owner’s earnings over GAAP EPS to capture the cash that can actually be distributed to shareholders, a metric that drives more reliable valuation decisions for traders, source: @QCompounding on X, Jan 10, 2026; source: Berkshire Hathaway 1986 Shareholder Letter. Owner’s earnings are calculated as net income plus non-cash charges minus average maintenance capital expenditures and required working-capital investments, which traders can convert into an owner’s earnings yield by dividing by market cap or enterprise value to screen for undervaluation, source: Berkshire Hathaway 1986 Shareholder Letter; source: Aswath Damodaran, NYU Stern, Corporate Finance notes on FCFF and cash flow yields. This cash-based lens is particularly useful for crypto-exposed equities where GAAP can be noisy, such as bitcoin miners with heavy depreciation and capex and MicroStrategy with digital-asset accounting impacts, so emphasizing maintenance capex and working-capital adjustments improves signal quality, source: Marathon Digital Holdings 2023 Form 10-K on mining capex and depreciation; source: MicroStrategy 2023 Form 10-K on digital asset accounting; source: Berkshire Hathaway 1986 Shareholder Letter. For trading, rank names like Coinbase COIN, MicroStrategy MSTR, and major miners by owner’s earnings yield versus sector WACC to identify potential long or short candidates, and track inflections in maintenance capex and working-capital turns around crypto-volatility driven volume cycles, source: Aswath Damodaran, NYU Stern, cost of capital and FCFF framework; source: Coinbase 2023 Form 10-K on revenue sensitivity to crypto price and volatility.

According to @QCompounding, Owner's Earnings equals Earnings Per Share plus Dividend Per Share and is presented as the cash flow available to investors after expenses, source: @QCompounding on X dated 26 Aug 2025. The original Owner's Earnings concept from Warren Buffett instead adjusts reported earnings for non-cash charges and subtracts maintenance capital expenditures and working capital needs, so this simplified formula differs from Buffett's definition, source: Berkshire Hathaway 1986 Shareholder Letter. A yield-based ranking approach can be applied by dividing Owner's Earnings per share by price to form an owner's earnings yield for stock screening, consistent with value strategies that rank by earnings yield, source: Joel Greenblatt 2005 The Little Book That Beats the Market. For crypto traders, shifts in equity cash-flow expectations and risk appetite signaled by such valuation yields matter because Bitcoin's correlation with U.S. equities rose markedly after 2020, increasing cross-asset spillovers, source: IMF Global Financial Stability Note 2022 Cryptic Connections Spillovers between Crypto and Equity Markets.

According to @QCompounding, investors should target companies whose Owner's Earnings grow at least 12% annually, noting that higher growth generally drives better returns (source: @QCompounding). Owner's Earnings is the distributable cash after necessary reinvestment, a concept outlined by Warren Buffett and used to assess true economic profitability (source: Berkshire Hathaway 1986 Shareholder Letter). Traders can operationalize this guidance by calculating a 3–5 year Owner's Earnings CAGR and filtering for names at or above 12% to identify capital-efficient compounders for potential outperformance (source: @QCompounding).

According to @QCompounding, focusing on Owner's Earnings removes the distraction of short-term market swings and highlights true long-term profitability for clearer trade decisions, source: @QCompounding tweet dated 2025-08-26. Owner's Earnings is described by Warren Buffett as reported earnings plus depreciation and other non-cash charges minus the average annual maintenance capital expenditures required to maintain competitive position and unit volume, representing distributable cash, source: Berkshire Hathaway 1986 Shareholder Letter. Using Owner's Earnings rather than volatile GAAP net income can stabilize valuation multiples and improve entry and exit timing in cyclical sectors by anchoring on cash-based profitability, source: @QCompounding tweet dated 2025-08-26 and Berkshire Hathaway 1986 Shareholder Letter. Practically, traders can reconcile cash flow statements and capex disclosures in Form 10-K and Form 10-Q to estimate Owner's Earnings and test the sustainability of dividends and buybacks during drawdowns, source: SEC Form 10-K and Form 10-Q reporting requirements and Berkshire Hathaway 1986 Shareholder Letter.