Hi Bob, "the price of a business underestimates the earnings flows going forward". Well, I'd generalize by saying value investors focus on the balance sheet, and Buffett investors maybe focus on the income statement.
People here posting their predictions for their favorite stock's earnings in '00 or '01 or '02 or maybe even in '99 -- they kind of are ignored or they get a rasberry (-g-) it seems to me. Actually very few people put out such earnings projections here. And only a couple of people ever seem to use a DCF model (although perhaps very successfully). So if you are saying that "value investors in a going concern" invest this way (business price vs. earnings flows), then you are either incorrect, there is a definitional issue (people on the thread are not 'value' investors), or perhaps people won't post or share their analysis or predictions.
Here's what I am saying. Enhancing learning by broadening one's scope, one's outlook of the world, studying strategy, etc. -- all great stuff. Does it enhance an investor's stock market performance? It should-- but does it? Where's some evidence that this is a profit making activity for potential investors? Even anecdotal evidence. The professors who teach us strategy - Porter, Mintzberg, Strickland, Grant, Worley, etc. -- they claim no success (as far as I can tell) in stock market prowess. Same issue and argument for Economics and econ. professors -g-. |
