In what ways did they fail to satisfy your requirements?
I suppose the truth of the matter that the more I think about it, the less I feel like I have even seen a good suspect yet.
Anything based on current numbers alone, no matter how massaged, is just too thin a slice of the pie. I think we are seeing some good examples of this currently where both price and earnings are clearly distortions of anything we could expect in the future.
Anything based on analyst estimates seems to me little more than flipping a coin. With as little regard as I hold the analyst's opinions on anything, why should I think that their numbers for anything beyond the current quarter have any believability at all and I only exempt the current one since they presumably have had sufficient guidance to keep them from being totally off the mark. If next year's numbers start looking wrong, they will just change them and no one will notice how many times they got changed before there was something to compare them to, so what does it matter if they are at all correct?
The closest suspects seem to me to be the FCF family, but there again I find myself wondering where I would get the numbers to plug in that were meaningful? If my growth figures are just some massage of analyst numbers and instinct, why would I think this gave me anything more than the rudest guess? I suppose if my high, medium, and low estimates *all* told me that something was over or undervalued one might give it some credence, but how likely is that?
Or, more to the point, whatever I am using as a source, what evidence is there of the accuracy of the projections. Given how poor just about every "system" is at predicting what will happen in the market next week, why would I think they were reasonable guesses for 5 years out?
I have too much on my plate right now to do the experiment otherwise I would be tempted simply because I like working with models. But first I would like to either see something that felt better to me or a test that showed that some system wasn't as seat of the pants as it seems it is. |
