In part one, I argued that the most common metrics like p/e ratio, dividend yield, and even terms like "dividend aristocrats" are not capable to detect long-term profit growth - which is essential for a successful investment. Even worse: these approaches may be misleading, making stocks with low and unreliable long-term profit growth look like attractive buys.
In this part, I present the correlation-growth model (CGM) describing long-term profit growth. I will then try to proof that a strong correlation between long-term profit growth of the past and the future exists by showing the