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The mathematics of investing haven't changed, but if you have some literature to suggest otherwise, I'd be very interested in reading it. You seem to think tha
by andrewmcwatters 5y ago
The mathematics of investing haven't changed, but if you have some literature to suggest otherwise, I'd be very interested in reading it.
You seem to think that I use these mechanical estimates as the primary method for purchase, but they are not.
I'm not sure what your point is about IPOs: they're historically a terrible time to invest, which is common knowledge.
And actually all of the companies you have mentioned have easily passed such litmus tests over their life time at different times. Sometimes they're overbought, some times they're oversold. If you buy when they're overbought, you'll end up with a lower IRR than if you hadn't.
- danielmarkbruce 5y agoThe math hasn't changed - the competition has. All the insanely obvious stuff is gone. You need real insight now. I didn't make a point about IPOs. I made a point about companies where real insight was required, both to see good investments and not make bad ones. Simple rules like "IPOs are bad", "dont pay x times earnings" etc, they haven't worked in years.
- andrewmcwatters 5y agoWe are certainly reading two different types of literature on the matter.
- danielmarkbruce 5y agoSame literature, different assumptions on how easy it is to predict cashflows or how to even go about it. A DCF is after all, discounting future cashflows. If it's all as simple as you say - really - just go start a hedge fund. You can start an LLC in a day, throw some money into a brokerage account and be up and running. There are still plenty of LPs who will invest in a simple long only fund, even with vol, as long as the performance is good.