Larry,
"you are looking backwards, not forward. One can learn from the past, but any decisions made need to be based on looking forward."
Ahhh, the "Blinders On" investment approach. <g> I'm sorry, but I very much disagree. Looking at the past helps determine how closely the execution of a company (any company) matches up with those "forward looking statements" made by management.
For example, a company that I follow has historically fallen short of company estimates, to the point where the analysts quit following the company altogether. After revenues and earnings (supposedly) stabilized, management was sounding bullish, and analyst coverage was finally begun with a "buy" rating. The VERY FIRST quarterly report missed the analyst numbers, and the stock price got cut in half. I called the management of the company and told them what an idiotic thing it was to allow that to happen. It will take a long time to undo the damage.
In ANCR's case, investors using your approach, and without the benefit of extremely cheap shares, would have been buying at 50, 60, 70, 80, 90, 80, 70, 60, 50, and would now likely be broke following the downgrades. Examining the historical performance might have given a clue that the stock price was exceeding all reasonable valuation metrics that might support it. ANCR may indeed set all time highs once again, but it won't do it based on numbers like we just saw.
Craig |
