The following picture neatly encapsulates what an investor does, as opposed to a speculator. More to the point, it lays out the core beliefs of a value investor. What it does not say is that by NOT focusing on the profits but on the process instead, profits come as a byproduct.
One thing that the markets have taught me in 20 years of investing, is that there is no way to predict the market. This includes making earnings estimates. Wall Street analysts are paid handsomely to make earnings estimates and they consistently fail. Case in point: the countless profit estimates and constant upward revisions for BBRY. 100% of the analysts covering the stock were wrong and stunned when Research in Motion reported a loss this quarter. Sure someone comes close every once in a while but it is pretty much impossible to keep this accuracy sustained.
Trying to predict the market most often ends in failure. Instead, evaluate investments based on what you know now, for a fact. You won’t find many ideas this way, but what you do find will be well worth the effort.
The following picture is worth printing out and putting it up on your desk where you see it everyday. I did.
Thank you @markhamdan for sharing this with me on twitter!