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‘Tis the Season - Why Listening to “Market Strategists” Won’t Work in 2013

December 28, 2012 | About:
During the last few weeks of 2012 we as investors are inundated with prognostications for 2013. “Market Strategists” smile and send holiday well wishes while waxing poetically about the trends and environment du jour. This may be comforting reading with a Scotch but it’s not actionable for investors.

What is actionable?

Cut down the noise from Wall Street and focus on the cold truth of business performance. Unbiased assessment of company and management performance is actionable.

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Which businesses have economic moats? Which businesses are sustainable? Which businesses are susceptible to an ever-changing technological or economic landscape? What salient facts do you know that others do not?

Flip this around: What do “Market Strategists” know that you don’t? They put together an estimate for aggregate S&P 500 earnings (most likely overstated based on historical results) and then select a multiple of earnings. What rigor does that have? Are these strategists accountable for their recommendations?

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Active investing is about deciphering the truth. Active investors outperform market strategists based on utilizing salient knowledge and staring convention in the eye.

This article is an exhortation for 2013. Commit to raise your game as an investor in 2013. Do proprietary research. Find robust companies selling for a song. Don’t listen to the mindless drivel in the financial press.

It’s not rocket science. It’s value investing. Have a great 2013.

About the author:

GrizzlyRock Capital
Mr. Mowery is a long-form thinker and value investor with a credit focus. In 2011, Mr. Mowery founded GrizzlyRock Capital which is a long / short investor in corporate debt and equity. Prior to founding GrizzlyRock, Mr. Mowery held leveraged finance positions on both the buy-side and sell side. Mr. Mowery holds an MBA from the University of Chicago Booth School of Business and a BA in Economics from the University of California, Los Angeles. Mr. Mowery can be reached at kyle@grizzlyrockcapital.com.

Visit GrizzlyRock Capital's Website


Rating: 4.0/5 (9 votes)

Comments

vgm
Vgm - 1 year ago
Agreed. I hope James Montier is listening.

Reminds me of Peter Lynch's statement "If all the economists in the world were laid end to end, it wouldn't be a bad thing."

Health and Prosperity to All for 2013 !!

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