Thomas:
Note, I have not the slightest dispute with the idea that *if* I had a good method of valuation that I believed in, clearly one could make better buying and selling decisions. I would love one. I'm just not comfortable about having found one yet.
Which ones have you experimented with and tested? In what ways did they fail to satisfy your requirements?
Apropos of which, as a companion challenge to my request that someone take some specific stock histories and show us what a specific buy/sell rule would have meant relative to a simple LTB&H, here's one for the advocates of particular valuation methods, at least those that relate to projecting a company's future like FCF. Take a couple of the stocks that interest us today, back up five years, using only the information available then, makes your projection, preferably with the mid, high, low bands. Then compare the projection to what actually happened and tell us how well they compared. To be fair, one should probably update the assessment once a year or so during that five years so that we see whether the model was self-correcting.
While I remain willing to help anybody if I can, I am too lazy to do a project of that magnitude. After all, I have no compelling need to "sell" a method. However, if you are sincerely interested in such a study, I am willing to assist you. In that way the study can be done by you, to your specific requirements, but I will be available to minimize any struggling with the method.
- Pirah |
