I was surprised to read that Ben Graham is actually not interested in the details of the company, such as what products they make, and so on. Instead, his concern is in the value of the company: A more
abstract concept that is made easier to grasp by accounting numbers. In one occasion, it was said that Ben Graham just looked outside the window and was getting sleepy when an associate gave details of a company. Then, after the end of the brief, Graham just simply said, "But, it is not cheap enough."
abstract concept that is made easier to grasp by accounting numbers. In one occasion, it was said that Ben Graham just looked outside the window and was getting sleepy when an associate gave details of a company. Then, after the end of the brief, Graham just simply said, "But, it is not cheap enough."
I find myself in a similar perspective as him. Frankly, I do not really care about what the company is making, about who is managing the company, and myriad other details. Many people, I believe,
will find it strange. After all, a common requirement often expected by people hiring an equity analyst (in fundamental department) is that the candidate has strong interest in knowing about companies. They are encouraged to learn everything about the companies and to put it first before the numbers.
will find it strange. After all, a common requirement often expected by people hiring an equity analyst (in fundamental department) is that the candidate has strong interest in knowing about companies. They are encouraged to learn everything about the companies and to put it first before the numbers.
Many people I know, and I believe some of you reading this, will also agree and tend to find comfort when knowing more stories about the company which stock you have interest in. I really don't give much care about any of that. All I want to know is how well the company creates value. In numbers. Equally important, I would also want to know if the expectation implied by the market gives me an opportunity. Only after I know the answer of these two questions, which can not be answered simply
by reading newspaper and gossips, shall I dig deeper. I am interested in the numbers of value. I, to say the least, am dispassionate of the company itself. I believe Ben Graham would be so excited if EVA was conceived in his time.
When talking about price movement, I also have interest mainly in pattern (Elliott Wave). Pattern is a more abstract concept because your mind has to make something to make the pattern comes alive. Certainly it is a more abstract concept than the fact that a certain stock just climbed 10% in a single day or a certain person or groups just bought some stocks. Many people will clamor to that. I, on the other hand, am quite dispassionate about any of that. In most of the time, I only am interested if the stock movement creates a wave pattern. For all I know, stocks could move up or down. They could easily going up for 7%-15% in a single day depending on how low its share price is.
Sometimes I find it troubling when I realized that when people talk about a stock, I care not much about the company nor how the price is going today. It is a strange world.
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