This forum is very useful in my investment, I want to say thanking you to all members of this forum.
I have one question to all my friends,
Which is more important Past data or Future prospect?
Many time we consider past data and try to find out growth prospect of company but if we look maltibagger stock thats past data is not so gud Eg. symphony
Many maltibagger company has not good past but there management have a great vision with good execution skill.
so, Please give comment in this topic to guide . "Which is more important Past data or Future prospect?"
I think past data will give reason for future growth expectation. Past data can give how management has weathered tough tym and financial prudence. i suggest to read dr vijay malik blog for more info.
hope giving recommendation of other good is allowed here.
This is like selecting a life partner.
both past and future are equally important. Past gives you the confidence. Future tells you the potential of making your life happy/meaningful.
But certainly only past performance is of no use if future looks uncertain.
“Past or Future” This is one of the most powerful questions in the realm of investment and no less a person than Ben Graham has answered it for us. His view is that Security analysis by definition is based on past data. Future numbers are not data, they are at best, intelligent guesses. Of course he has a few checks to ensure that the investment does not go to zero in the future. An investment based on analysis of past data with a sufficient margin of safety is the only true Value Investment approach.
On the other hand, as per Graham, operations based on future predictions is nothing short of speculation ! This view is also something that resonates with Howard Marks.
Value investment philosophy aims to preserve capital, i.e. return of Capital is more important than return on capital. Growth Investment philosophy on the other hand aims to grow capital rapidly and is based on future grown projections.
Hope this helps !
No one knows about the future. No matter how much analysis one does, one can never predict the next war, next earth quake, next scam.
In fact people who claim to “know the future” are basing their predictions on the past. It is extremely difficult to catch a turn around story early because we never know which quarter the turn around is going to happen.
All we can say is if the company has performed better in the past then there is a higher probability of it performing better in the future.
That is why when I created http://investr.co.in I chose that only the numbers should guide me the way to the future.
The debate is on Certainty of Past and Uncertainty of Future. And if to evaluate the future uncertainty in terms of probability and ensuring that probability is in our favour prior to making a stock market investment is Speculation or Gamble than yes, most of us are Gambler.
Answer lies in my opinion of how best we use this probability science in our favour to minimise the risk and of course also bring in e a diversification/ portfolio impact in the picture to further minimise the probability to hamper my wealth and negate few odd negative events.
Article by Prof Sanjay Bakshi on Bayes’ Theorem well explains how to reduce this risk even while working on probability. One may find it interesting to go through with this context…