I am not talking about mass searches and the like here, just examining entry and exit points to the universe one has already selected. I.e., one didn't buy Such and Such at X because of the tool one was using at the time; was it a good decision?
Certainly the individual investor always gets that kind of feedback. Of course one must be careful to evaluate over an appropriate time frame. e.g., if I buy something it usually goes down first! As for refining the decision making process, yes that goes on, albeit crudely.
Is there a signal that would have gotten one out of Such and Such before it declined? Are there reliable signals that would allow one to get in and out of a company multiple times during a bubble and bust cycle to profit?
I believe that to be getting outside the realm of valuation for the most part. Unless you have extreme volatility in both directions, using valuation should not result in many transactions at all; it is not distinct from buy and hold.
Worse yet, they are probably using published numbers.
I don't understand what you are saying here.
I am saying that speculating on the future of a company with a history of 15-25% growth involves less pure guessing than one with a history of 15-150% growth.
Sure. Agreed. But that doesn't change the principal. IMO that would prompt the prudent investor to protect themselves, either through making deliberately conservative guesses, reducing the size of the position, or both; maybe there are other means as well. It certainly doesn't suggest to me that one should say "my guesses are so wrong, I'll just go with it and trust."
all I am looking for is a bit of validation to support one or more of the proposed methods of valuation, particularly as applied to the family of companies we are discussing here.
I think we can agree that validation that would meet your standards is not currently available. For that matter, you've made previous remarks that suggest that meeting those standards may not be possible. Of course, this lack of validation to those standards applies to probably any quantitative or qualitative methods we could name. Where does that leave us? Until we invent a time machine, I guess we'll all have to muddle through as best as we can, using whatever stone tools we prefer.
- Pirah |
