Things Value Investors Don’t Care About

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Things Value Investors Don’t Care About
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One of the biggest challenges for investors is filtering out bad, useless, or even costly “information.”  I have a method for screening out the noise and using my time more effectively.  Part of it is keeping the TV on mute and using TIVO to check out anything that is really significant.  You can also just skip articles that obviously do not meet the test.

Play Quizzes 4

Here is a good starting list of what to ignore.  Feel free to suggest additions.

  • The Hindenburg Omen – or any other method using BO (i.e. backtested overfitting) and failing the smell test.
  • Commentary from people who are famous for being famous – their websites confuse media appearances with credentials.
  • Tobin’s Q – a great idea fifty years ago, but not relevant for modern companies.
  • Bond guys opinions about stocks – don’t ask your barber if you need a haircut (Warren Buffett)
  • Stock guys opinions about bonds – see above.
  • PMI data lacking multiple business cycles – you have to start somewhere, but we do not need to believe it.
  • Recession predictions from some “expert” who cooked up a model last week – too few cases, too many variables.

You can save many hours and also avoid some bad decisions by rejecting this useless and harmful noise.

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