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.
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?
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.
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.
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?
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.
