The intelligent investor should be interested in the possibilities of profiting from these pendulum swings. There are two possible ways by which he may try to do this: the way of timing and the way of pricing.
I would rather be vaguely right than precisely wrong
The tech fund managers could only hold their noses and invest the money in whatever stock was available that fitted the description ‘tech stock’.
Using trailing twelve months earnings that are impacted by a recession is a mistake
Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.
This approach has worked
What is ‘investing’ if it is not the act of seeking value at least sufficient to justify the amount paid?
A high ratio of price to book value, a high price-earnings ratio, and a low dividend yield – are in no way inconsistent with a ‘value’ purchase.
Today’s FAAMGNs, that is today’s ‘vital few’, will not be the ‘vital few’ 20 years from now
If a company’s capital expenditures are simply maintaining the company’s position in its markets, it free cash flow may be unduly high