Ann: Response to ASX Aware Letter, page-203

@kane93

he's not wrong per se.

but what he's attempting to do is apply fundamental (ie historic data) analysis to non fundamentally driven stocks.

the problem is that - if one were to follow his methodology to its logical conclusion none of the 3 stocks are worth anything but their cash holdings .

BIQ next quarter expects to lose $4m for eg. BTH $3m.

all 3 stocks appear to have their equity valued as is purely because investors belive they will reach cashflow positive sometime in the next 12-24 months - and be aggressively cashflow positive once they hit that inflection point

So once you isolate that - the only useful benchmark for comparison of the stocks is their forecast future revenues over the relevant EV

If a seriously risk off market breaks out all of them will trade lower - because they are spec risk stocks

But thats share price.

In terms of fundamental earnings outlook all 3 put you in the same position - one must go by company projections to value future earnings to assess the risk/reward profile of the stock

So then all 3 pivot on 'trust'. Except its not trust per se - its legally binding/actionable market disclosures

Other than that its simply a subjective assessment