Philosophically I think it reasonable to believe that every asset has an intrinsic value (an objective worth). The only problem is that no one knows for sure what that true value is.
And so at any point in time, the task of an investment manager is to ascertain (1) whether current market value is above or below intrinsic value, (2) determine at what point in the future market value will converge with intrinsic value, and (3) anticipate whether there will be some overshoot on the reversion back to intrinsic value.
In some ways the search for truth in investing, is like the search for truth in life. To borrow from the ancients, you are always in the process of Becoming and never quite arrive at the point of Being.
No comments:
Post a Comment