Past performance good indicator for future performance?

nobody every agrees on exact trading strategies, and it's a given that most people in here giving their 2c worth have never purchased stock before.

All things being equal, in my opinion, past performance is a good indicator of future performance. However things are not all equal, and nobody can tell what the future holds. That's why if you are a sensible investor, you dont make a decision on one metric alone.

Past Performance being good/bad might indicate that the board and executive management know what they are doing / have no clue. It creates a strong sense of confidence / weariness respectively. When you take this into account with the actual financials of the company, strategy and future plans, and the general outlook for the industry etc. along with your personal preferences like dividend %, cost, PE etc. etc. then you're in a better position to consider the trade.

Going on Past Performance alone, is like going on price alone "It's cheap! I'll buy it!". So to be successful in a sustainable way, you need to factor in as much info as you can to your decision, and learn from your mistakes and emotional short comings.

Past Performance is an indicator. I think a good one. It is not what you should solely base a trading decision on.
 
I got a permanent infraction by admin so I will have to go annoy people on my other forums.
Bye DJ. :(
 
alf101 said:
Don't worry, you can get 10 of those before you get banned.
Make a new nick so long.
Click to expand...

Are you sure? I just got banned from the ecigarette forum. That's why I'm back here.
 
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Markd. Thanks for your post but I must add this as the OP of this thread.
I totally agree with you about making decisions on one metric alone. Going on past performance alone and especially on long term past performance is good if you have nothing else to go on but can destroy you. This is why I said that one must combine this with future fundamentals. If you know that the Co has great forward looking fundamentals and a good history, then you have a winner.
 
Markd said:
nobody every agrees on exact trading strategies, and it's a given that most people in here giving their 2c worth have never purchased stock before.

All things being equal, in my opinion, past performance is a good indicator of future performance. However things are not all equal, and nobody can tell what the future holds. That's why if you are a sensible investor, you dont make a decision on one metric alone.

Past Performance being good/bad might indicate that the board and executive management know what they are doing / have no clue. It creates a strong sense of confidence / weariness respectively. When you take this into account with the actual financials of the company, strategy and future plans, and the general outlook for the industry etc. along with your personal preferences like dividend %, cost, PE etc. etc. then you're in a better position to consider the trade.

Going on Past Performance alone, is like going on price alone "It's cheap! I'll buy it!". So to be successful in a sustainable way, you need to factor in as much info as you can to your decision, and learn from your mistakes and emotional short comings.

Past Performance is an indicator. I think a good one. It is not what you should solely base a trading decision on.
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Now why has this not been dissected and misquoted as mine are????
Quote"Past Performance is an indicator. I think a good one."End Quote.
Surely this extract will give someone good ammo?
 
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marco said:
Now why has this not been dissected and misquoted as mine are????
Quote"Past Performance is an indicator. I think a good one."End Quote.
Surely this extract will give someone good ammo?
Click to expand...

Fair question.

My response would be to copy/paste all of the things that were said in response to your OP at the start of this thread
 
Another month has passed and my method has still kept me at No.1 in the share picks challenge after 9 months. Now you might say that 9 months is not proof enough. Not so as I only entered the challenge 9 months ago. I have used my same stocks every month for the whole period and they keep winning.
So why are they the tops? Past performance non volatile, smooth uptrend charts and great future prospects with good fundamentals to carry on doing so.
 
We heard you the first hundred time, marco. We've addressed this with you a dozen times already.

Fsck off and stop trolling the forum...
 
DJ... said:
We heard you the first hundred time, marco. We've addressed this with you a dozen times already.

Fsck off and stop trolling the forum...
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Then tell me why all the dozen "addresses" were all against my method, mostly from you when I have proven that it works? Now stop trolling and go away please.
 
marco said:
Then tell me why all the dozen "addresses" were all against my method, mostly from you when I have proven that it works? Now stop trolling and go away please.
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Still, you do not understand a word that anyone said to you. You only hear/read what you want to in things.

That infraction of yours will not be the last...
 
DJ... said:
Still, you do not understand a word that anyone said to you. You only hear/read what you want to in things.

That infraction of yours will not be the last...
Click to expand...

Your input here has not helped anyone but yourself. Why don't you rather DISCUSS my method of investing instead of attacking ME. I have proven over and over that my method works. Did you not read what this thread is about?
My personality is who I am but my attitude is who you are.
 
marco said:
Markd. Thanks for your post but I must add this as the OP of this thread.
I totally agree with you about making decisions on one metric alone. Going on past performance alone and especially on long term past performance is good if you have nothing else to go on but can destroy you. This is why I said that one must combine this with future fundamentals. If you know that the Co has great forward looking fundamentals and a good history, then you have a winner.
Click to expand...

In my experience, there is always more than just one factor to consider in making the trade. I've never based a trade on 1 factor alone.............actually I have, very early on, and I paid the school fees accordingly.

In some sense we are all looking at the past. The Annual Results, for example, is a look back at the last year. Not necessarily just the share price, but the results influence the share price at some point. So if we're not looking at the past performance (because what we know NOW is based on the past, be it a week, a year, or a decade), then we're making a decision based on the future, and nobody knows what the future holds. We can estimate and try to predict, but we don't know. Hence, past performance can never guarantee future return, but I still think it could indicate it when taken against other factors.

My personal criteria for making an investment decision are:
Type of Company/Industry against the spread of my portfolio (i.e. my eggs are not all in one basket)
Dividend Yield (what it was in the past, and what its expected to be in the future)
P/E ratio
Last set of results, results summary from the board, plans for the future and broad strategies
Industry outlook
Past Performance, preferably with the same or similar management team in place

When I find stocks that have values that fit my preferences for the above, I put them on a watchlist for a while and get to know them better. Once I'm comfortable with my selections I invest. I don't always win, because that's the nature of the game, but i stick to the method and I employ discipline about when i need to get out/cut my losses.

I pick winning stocks probably 8/10 times. There is always a risk involved and the more data I can pull together to try and quantify and understand the risk, the better. Past performance is in there. This works for me - if it doesn't work for someone/anyone else, fine.

We all have different strategies and approaches to investment. Alot of people couldnt give a damn about fundamentals and make trading choices purely on technicalities, or the shape of a graph, and that works for them. Also fine! There is no right way or wrong way. If you have a system that works for you, crack on.
 
marco said:
Your input here has not helped anyone but yourself. Why don't you rather DISCUSS my method of investing instead of attacking ME. I have proven over and over that my method works. Did you not read what this thread is about?
My personality is who I am but my attitude is who you are.
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Fine, I'll try one more time.

I still think that theoretically past performance has no bearing on future performance. Future performance is determined by what is happening now, and what is happening in the future. So we analyse the past to understand the present to make a 'guess' at what will occur in the future.

Marco, the biggest problem with your strategy is risk, which is unacceptably high for the average investor. The risk is so high that it is effectively gambling even if you are picking stocks in a sound manner. If Coronation was rocked by a scandal today and their share price plummeted then your strategy destroys you.

Secondly you have destroyed all of your credibility but not understanding basic financial concepts such as passively managed funds like SATRIX, penny stocks, taxation procedures (even though you've been trading for 15 years according to you, so how can you not know this unless you were evading tax?), and many more. Your lack of credibility implies that you do not fundamentally understand why your investment is doing well and that all advice and debate you give is coming from a position of ignorance and not knowledge.

Thirdly when you ask for discussion and it is given to you, you only respond with boasting about your returns and insulting people. What I'd like to see in response to this post is a discussion from you about the level of risk of you strategy. Not a copy/paste of your performance and/or insulting me or associating me with DJ or others.

Lastly, please stop thinking that investment is a competition. It really isn't.
 
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DJ... said:
Still, you do not understand a word that anyone said to you. You only hear/read what you want to in things.

That infraction of yours will not be the last...
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Alf said I have 99 left.
 
Now why would you diss my method as it worked very well since 2009? Are you guys cross that your shares are not performing?
I post my results only because nobody agrees that my method works.
 
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