You have inadvertently explained a lot of what's being going on in the Indian markets for the past few years. Great post. Q. What are the right lessons from a decade like this?
-
-
-
Thanks. I think the things is there is nothing unique to be learned from this decade specifically. It's always been the case that when multiples go up, it's easy to report good returns, and when they go down, hard; but returns are eventually driven by price vs. future dividends.
Kraj razgovora
Novi razgovor -
-
-
Wonder if any of those insurers/pension funds you reference in an earlier post have succumbed to this.
-
Everybody does, because secular market cycles can last decades and humans are attuned to learn from short term feedback. The price validation is also a fundamental contributor to the magnitude of the cycle itself as it is self reinforcing - flows beget performance, & perf flows.
Kraj razgovora
Novi razgovor -
-
-
Great article. Ironically quant value investors are making a similar mistake. Assume Total Stock Return = FCF Yld + Growth Rate. There is no “first principle” for why high FCF yld stocks should always outperform long term.
-
Agreed. Its always a matter of price vs cash that comes out in the future. A challenge to learning how to value stocks is that it usually takes a decade or more to find out if your valuation was ultimately correct. This is why it takes decades to learn how to be a good investor.
Kraj razgovora
Novi razgovor -
-
-
As Michael Burry says: "I try to buy shares of unpopular companies when they look like road kill and sell when they've been polished up a bit." What might look simplistic to the uninformed is a stock-picking pro reasoning from first principles and knowing the rules of the game.
-
Yes, but most importantly, it glosses quickly over the years and years of negative reinforcement the market can often met out when u invest in these types of stocks. They can keep going down for years while glamour sectors surge. Most dont have the stomach for it.
- Još 1 odgovor
Novi razgovor -
-
-
Best article of the year, thank you. I see all my value investing community fall into the ´quality over price’ motto
Hvala. Twitter će to iskoristiti za poboljšanje vaše vremenske crte. PoništiPoništi
-
-
-
-
I think people can sometimes forecast ~5 years into the future. If they truly understand the business and the growth trend is already clear. Paying 30x seems reasonable if you can confidently (with variance) guess that it will grow 20%/year for the next 5, and it's a great biz.
Kraj razgovora
Novi razgovor -
Čini se da učitavanje traje već neko vrijeme.
Twitter je možda preopterećen ili ima kratkotrajnih poteškoća u radu. Pokušajte ponovno ili potražite dodatne informacije u odjeljku Status Twittera.