A lot of people follow the markets more closely than most of us do. They are probably financial gurus in their own right looking for gold by reading between financial statements. But yet, some fail to understand that the best pick is not all about finances and balance sheets! They are all about people who run the business.
Back in 1994, I dont think any financial guru saw enormous value in Infosys unless he did a people analysis and evaluated the management strength which was less hyped those days! Who would have seen value in investing with Dhirubai Ambani in the late 70's. I think to a large extent, the internal stakeholders and the people who know the key people are the best ones to pick a successful story. Financial statements always carry the tag better read as - "Statements are mere indicators of past and present performance and represent no promise on future performance"!
If you were to pick a gold mine, remember - its people first, and then the processes and systems build within. For novices, there is no easy way to judge management talent. But, the current media to a large extent is more helpful in this respect(only in comparison with the past). My journey in investing, I hope would move to the next level of idetifying future gems than just plain investing. Happy investing -:)
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