SGH, page-78

In the 1920's analysts were called investment statisticians. They would look at long term averages.

There are obvious flaws but it's a good place to start. Long term averages describe a businesses historical economic position.

If you are going to venture from that area into growth stocks which are considered blue-chip (and therefore perilously overvalued) you need to really KNOW the business.

Turns out Quindell was a fraud and frauds often look for a sucker to buy them out before bankruptcy. It's very easy for a company to have a few good (fake) years of earnings, looking back through a couple of economic cycles would give more confidence.

My preferred process is to avoid growth like the plague, stick to companies with strong economics and financials which are considered speculative by the market.

It's logical that only hated companies make safe investments.

I nearly got caught out on this one.

It's totally out of my experience to evaluate a growth stock, the difference between doc and I is that I know what I don't know. Also not my job to warn people about random stocks though I did, in 2015 on the nz forum.

After I read the Gotham report.

So to avoid this in future, you could avoid growth stocks like I do.

Or only buy when you honestly really understand the economics are strong. From an on the ground perspective.

There's no way to slash your way through staff to prosperity if you don't have the economics behind you. From the day they bought Quindell it was all over for SGH bar the shouting.