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.