[DesertCat]

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until he makes a prediction about how the market thinks/acts/moves/eats/pisses/whatever and it doesn't work.


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It is not supposed to work every time just on average.



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I can understand David's argument. Essentially that if a company has 5 valuation factors, and the market is totally misevaluating factor 5, on average you could do well because odds are factors 1-4 are evaluated correctly. I can agree with this, though I'm not sure what edge it gives you and how many deals you'd have to participate in to confidently overcome variance.

The part I don't understand is how do you know the market is misevaluating factor 5, when all you know is the sum of 1-5?

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Many of us have been here for a long time and heard quite a few suggestions over the years from DS, and the record is very good.



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Is it? In the tiny sample I'm aware of, David's been spot on. But there are psychological reasons why you might remember David's wins better than his losses. It's not as if David is running a public investing service documenting every pick, or an audited fund. At this point we don't know David is skillful any more than that guy who sat down at your poker table and won the first 3 hands.

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Many of us use our own ideas in exactly the same way DS suggests and the record is again good. It is pretty much the Peter Lynch method.


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Uh, no. Peter Lynch understands how to value a company. He would always compare the propects of the business (it's value) vs. the price the market was giving him.


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The jury may be out on just how efficient the market is but if somehow the market is in fact close to perfect, it will be useless to learn all the other company evaluation skills and details anyway.


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It's not really out. Most academics agree in the weak form of the EMT, i.e. you can't predict price trends. They have conceded that skillful individuals can beat the market, as they could never explain my walking breathing two word proof.

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Since the market seems not to be perfect with regards to these "insight ideas" it must be better to spend almost no extra time and go for it with the ideas. Also it is in line with general laziness ( the true path to wealth).

D.

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Who said doing valuations didn't allow you to be lazy? Read about Monish Pabria, who's crushed the market while napping every afternoon. But don't be so lazy to think you can be ignorant and beat the market through anything but luck.