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| Name | Investors - Learn From Your Mistakes | FAST Graphs |
| Video Uploader | Video From FASTgraphs |
| Upload Date | This Video Uploaded At 31-03-2021 17:40:02 |
| Video Discription | FAST Graphs Friday Analyze Out Loud Video: When Facts Change, Change Your Mind-But Not Before. Learn Fron Your Mistakes Forecasting Matters I believe that it is possible to forecast future business results within a reasonable range of accuracy. In contrast, I believe that attempting to forecast future stock price movements is a mistake, and an exercise in folly and futility. In my experience and opinion, this is such an important concept that investors need to understand - but alas, very few do. The daily volatility of stock price movements is a strong seductress and, in my experience at least, most investors simply cannot avoid the temptation. As a result, fundamentals, and the valuation they represent, are typically ignored or simply overlooked while recent price movements are obsessed over. Forecasting Is the Key I believe that estimating future earnings growth is a major key to successful long-term stock investing. If you are a true investor, then you are actually investing in the business. Consequently, the success of the business that you invest in is going to be the primary determinant of how much money you can expect to earn on that investment. Stated more directly when you invest in a stock you are buying its future earnings potential. To my way of thinking, the only logical reason I would ever want to own any stock (business) is because I believe that the company is a profitable enterprise. But not just in the past, or the present, but most importantly in the future. After all, and as I previously stated, future profits will be the source of any long-term return expectations I might have. Moreover, the growth of those profits will be a primary contributor to the total annualized return I can expect the investment to produce on my behalf. Therefore, I believe as investors, we cannot escape the obligation to forecast future earnings, because our results depend on it. Furthermore, we should not guess, nor should we simply play hunches. Instead, we must attempt to calculate reasonable probabilities based on all the factual information that we can assemble. Then we should apply analytical methods based upon our earnings driven rationale that provide us reasons to believe that the relationships producing earnings growth will persist in the future. In other words, we must strive to forecast future earnings as accurately as we possibly can. On the other hand, we should simultaneously realize that perfection is not to be expected. As an aside, there are many who criticize or even claim that we should eschew utilizing forward earnings forecasts when trying to determine fair value, or even when trying to decide what stock to own. I find these positions rather bizarre. I cannot think of any logical reason why anyone would invest in a business unless they had a reasonable expectation of that business’s ability to generate future profits. Since I am confident that both capital appreciation and dividend income will be a function of the company’s future earnings power, estimating future earnings must be the essential element of long-term success.” As investors, we can learn a great deal from the past about the businesses we are contemplating investing in. However, as investors, we must also recognize that we can only truly invest in the future. Consequently, although understanding a company’s history can help us better understand the business, our success is predicated on our ability to recognize the business’s future potential. And most importantly, we can also learn from past valuation levels, but we must calculate the present and future value of the business based on its capacity to produce a future income stream on our behalf. At its core, fair valuation is a function of discounting future earnings, cash flows and revenues back to the present value. (Reviewing Carnival (CCL), Meredith (MDP), Owens & Minor (OMI), Alpha Pro Tech (APT), Dick’s Sporting Goods (DKS) SUBSCRIBE to our YouTube Channel! Try FAST Graphs for FREE Today! https://www.fastgraphs.com Click here for The Dividend Kings two-week free trial: https://seekingalpha.com/author/the-dividend-kings/research #stocks #investing #dividends OkMLb7Fy2MM |
| Category | Education |
| Tags | mistake | Forecast | forecasting | Carnival | CCL | Meredith | MDP | Owens & Minor | OMI | Alpha Pro Tech | APT | Dick's Sporting Goods | DKS | Dick's | Dicks | FASTgraphs | fastgraphs | Carnevale | investing | stocks | markets | forecasting for growth | Forecasts | stock forecasting | forecasting stocks | stocks to buy tomorrow | carnival cruise | financial forecasts | forecasts for 2021 | investor mistakes | investment mistakes | Mistakes in investing |
