Magic of compounding

How can we get rich on stocks? Calculating the compounding per share growth rate.

What we want from out company, is for it to make more money as time goes by. Who wants a business that stagnates? Anyone? That's what I thought.
So, in order to see if the management is utilizing the company's money right, we need to check if the earnings are growing with time, and determine how fast they are growing (per share growth rate).
What we want to do is to look at the company's track record of earnings for the last ten years, and maybe also the last 5 years to see it the last 5 was better than 10. This will help us get a better picture of whether the company is getting better and better.

Year 1 - 1.18 USD
Year 2 - 1.00 USD
Year 3 - 1.20 USD
Year 4 - 1.36 USD
Year 5 - 1.62
Year 6 - 1.71
Year 7 - 1.89
Year 8 - 2.50
Year 9 - 2.86
Year 10 - 3.70

The way we figure out if we are going to get rich or not is if we take our financial calculators (Like the TI BA-35 Solar financial calculator) or the financial calculators available on the internet (see this link and this link too) and we do the following:

Mind you that these instructuins relate to the Financial Calculator, play around with the online calculators until you know what you are doing, its pretty easy. 1. We want to calculate the compounding annual per share growth rate.
2. We take the Year 1 per share earnings i.e. 1.81 USD as our year one data, then use the Year 10 data of 3.70 per share earnings USD. We also take 10 as the number of years.
3. We punch the PV (present value) of 1.81, then punch 3.70 as FV (future value) and 10 as the number of years, we click compute (press compute % if you are using the calculator). And you get the annual compounding rate of return of 12.1%
4. We can also do the same for the last 5 years. we just punch 1.62 as PV and 3.70 for FV and 5 as the number of years, we will get 16.6%.

The numbers are nice, the company is generating a 12,1% per share earning growth every year and an even better 16,6% earnings growth in the last 5 years. These guys must be doing something right.
What Buffett would do, was to just buy the company when some negative news hits it, or they experience some crisis situation that they can get out of. If the company is not in debt heavily and is strong in general, we can buy it cheap and make money on it while the price recovers. That's how Buffett made his fortune.
But there is more to it, keep reading...