Wednesday, 18 April 2012
Sorry guys, please don't be the 'taxi driver' follower investor.. (sorry for the cliche, and I have greatest respect for & have some great Taxi driver friends who had to study 3-5years of "the knowledge" to become a black cab driver)
Most of the present 'market' is about NEWS (real or created!) that drives short term & volatility, noises drown out real focus of investors' investing strategy.. that is what I am thinking what the Prof. is referring to as momentum investing (I got a finance MBA and am still learning on a daily basis from likes of Prof. Aswath)
Companies like this interview above (Bloomberg) is about 'reporting' market changing events (nothing wrong with that) which might or might not affect real 'intrinsic' value of the company but the 'sentiments' which is reflected of the share price which is generally (& rather frequently) bear a life of its own compare to the underlying performance and viability of the company... (as mentioned the 5% down share price of Apple yesterday).
Just listen to the interview again.. the professor was just stating his view.. and that he does not 'understand' momentum investing (which is nothing wrong).
Feel free to do so as you wish, but do not cry to the regulators and friends & family when you lose a big chunk of the investments in the years to come.. as it is not your game, and it is set by others..
##NB: Credentials: Do not forget the professor is the handful of people that "predicted" the DOT COM BUST .. read his book "Dark side of valuation" 2001 http://amzn.to/J9JqHt , and free paper 2000 (pdf download): http://people.stern.nyu.edu/adamodar/pdfiles/papers/HighGrow.pdf
In short, Disregard his comments at your own perils ..
Just look at the shorter term 'momentum' investing and the 'boards' that focus on share price Mostly and please the short term market.. examples of great corporations like GEC/Marconi that had billion of cash.. what happened? say no more.
did a quick search and saw this link to caslon analytics (no relationship with them nor have I come across them before) re dot.com : http://pratclif.com/economy/financial%20crises/dot-com%20-telecom-bubbles.htm
my 1pence worth of comment which will most likely be drowned out... we will see in 3-5years.
Read more: http://www.businessinsider.com/finance-guru-damodaran-dumped-apple-2012-4#comment-4f8ec92beab8ea9946000067#ixzz1sOtwecqH