A blog that I visit a lot, through my RSS reader, is Gauging Corporate Financial Results. I really like their approach to fundamental analysis and yesterday they reviewed their past analysis for Tidewater Inc (TDW) in their TDW Looking Back and Ahead post.
I thought it would be fun to see how TDW fares in a Monte Carlo simulation, so after 10,000 possible outcomes I find that TDW is a decent long term money maker. Over the past 10 years of data, TDW has a 65% chance of having positive returns.
There’s a 7% chance that TDW could see a 8% or greater negative return and the 90% confidence level return is 7.3%.
It goes to show you that holding a good company in a long term portfolio can make money for you. Buying a good company when no one wants it takes guts it’ll make you even more money in the long run!