I think it’s easier than trying to play the market and forecast the market’s gyrations. Most investors are outlook-conscious. I’m price-conscious. I have this easy way of measuring price, quantity and quality. Everything is in the balance sheet–the only way you know whether you’ve covered all the bases is to look at the balance sheet.
Even longer forecasting power, is called “Orders Received” or “Bookings.” It leads all other series in the business cycle. Why should it not? Order must be booked by the salesman before goods can be made in the factories, or receivables financed by the banks. Naturally, orders move first, business volumes next and interest rates last. […]
In emerging markets, an investor cannot trust the numbers entirely, owing to the lack of sophisticated and transparent accounting systems. Thus, financial analysis in emerging markets requires far more detailed assessment of management, the business, and the environment than in advanced-economy markets. Western-developed value investment strategies, he recognizes the differences in emerging markets: higher volatility, […]
Ray Dalio: “The biggest mistake investors make is to believe that what happened in the recent past is likely to persist.” Tom Russo: “I think…it’s the inability to do nothing for a long period of time. The inability to do nothing is what most people get tripped up on.” Howard Marks: (1) “I think it […]