here's another anecdote you might find entertaining: i invested in one company late last year based on an initial screen using this kind of extrapolation of hi

here's another anecdote you might find entertaining: i invested in one company late last year based on an initial screen using this kind of extrapolation of historical financials, and a bit more reading through the company's annual reports to get a better feel of the business model. the business model seemed a little weird but the business' financials looked good, especially compared to the company's share price. since then i've updated my expectations and expect to earn about -80% to -100% return on invested capital. i failed to read symptoms of possible accounting fraud that were signaled in public disclosures on the company website at the time i invested, and a few months later directors have resigned and been replaced, the company has been delisted for failing to file quarterly financials, and the company has released the results of an accounting probe that has explained how the former directors fabricated all of the company financials, starting off with dating sales before goods were delivered to customers, and ending with making payments to the company from their personal accounts and registering the payments as if they were sales from external customers. part of operationalising this kind of valuation model into a profitable investment scheme also needs a supporting due diligence function, which in this instance i failed dismally at