Even though I am a huge supporter of yearly reports instead of quarter reports I tend to find it very boring when there are no news arriving from my companies as it is right now. Well, Intel arrived with their report so that was the starting point of the other reports to arrive but still. I was starting to get bored.
Is it then good or bad when no news are heard concerning the companies?
In a broader sense then I would say that it is good when no news appears. Today's media is more or less only reporting negative news and when they find out something bad about a company then it will directly be in the news, if it does not concern themselves, their owner or a big advertisement contributor that is.
Peter Lynch and Warren Buffett are both known to say something in the line of "invest in companies that any idiot can run because someday an idiot will run it". As a contrarian investor I am very focused on the figures being presented by the companies and I am currently not thinking so much about the managers even though I have tried a little lately.
What I started to ask myself while writing this article was... if a company would only file reports every year or every five years for that matter would I then still invest like I do now? I know that Warren keeps claiming that he only makes investments where he would not be scared if he would not receive any daily prices from the stock market on his investments and he would be happy to get it five to ten years later.
When he has talked about that then my thoughts have always been about the moat of the product/company and his conviction concerning how good his current investments are. I have never thought about it in the sense of the management running the company but the more I look upon the time aspect the more crucial the management becomes. I mean even Munger keeps saying that their investment strategy is dead simply and he always bring in the management and the moral of them when he brings up that subject.
When I get quarter reports I tend to care less about the management running the companies, which of course is completely crazy, but I am fairly certain that if I would only receive reports once per year then the management would become a more important factor to bring in to the equation before making any investment. However the market is running on quarter reports so that means that I need to change my thinking.
Hmmm... so what started out as complain about me being bored became a conclusion that I need to improve my investment strategy and look more on the management in the future. I also need to accept the boredom of silent periods and I should probably embrace it even more to improve my investment approach.
The running mistakes for 2014 has now been updated on Investment Mistakes Made.
No comments:
Post a Comment