Thursday 15 January 2009

Reader's Letter Of The Day

From the FT:

Sir,

Haig Simonian (Safe becomes sexy when risk is a dirty word, January 7) quotes Andrew Garthwaite, global asset allocation and equity strategist at Credit Suisse, saying: "In overall macro terms, we’re going back to an environment where we examine cash flow, the balance sheet and the long-term viability of the business. What we’re looking to buy in this environment is the company that’s going to be around in five years’ time and has the ability to win market share."

What were analysts and strategists "examining" before the financial crisis hit?

Antonius Kufferath, Aachen, Germany.

5 comments:

John B said...

"What were analysts and strategists "examining" before the financial crisis hit?"

2-year projected EBITDA, plus the likelihood of 1) a private equity takeover 2) securitisation or sale and leaseback of property assets, AIUI.

Mark Wadsworth said...

"AIUL"?

Nick Drew said...

2-year projected EBITDA

which was at least better than the worst excesses of the dot.com bubble, when they were looking for

- a narrative
- a pulse
- err ... that's about it

having actually shipped product was a bonus, and earnings were irrelevant

to be fair, it did settle down to where they were looking for

- top-line growth, year-on-year
- some metrics around revenue recognition, recurring income and R&D
- some (any) degree of profit

Lola said...

Well. whadayano. Analysts haven't been analyising.

It's called value investing you fuckwits. (Note I am SCREAMING at the keyboard).

Two words. Warren Buffett. Sorry four. Benjamin Graham.

I'm in tears now.

marksany said...

As I understand it