Value Library

The following is an excerpt from the ABC Perspective - January 2003 - Pg. 3

If someone says, "I have worked hard and I have not been successful," don't believe him. If someone says, "I have not worked hard and I have been successful," don't believe him. If someone says, "I have worked hard and I have been successful," believe him!!! - Talmud

Let's face, it the investment business is a fulltime 24 hour - 7 day a week job. Information, which is the heart of investment analysis, is a constant, never-ending flow of economic data, corporate results and analytical commentary. In all candour the analysis of this non-stop information is hard work. As investment analysts we must be always alert and ever-ready to dissect and astutely utilize all information which may bombard us.

Not all information, however, is relevant and meaningful to an investment decision. In fact, it is hard work to distinguish between the red herrings of news and the serious consequential facts which are germane to successful investing.

Research is the cornerstone of successful investing and "working hard" is the key to successful research. Furthermore I am convinced of the strong relationship between hard work and investment success. Working hard may include waking up early in the morning to study overseas stock reports or to fully prepare for the 9:30 AM market opening. It may also include thoroughly poring over a company annual report or extensively reviewing the technical stock chart patterns of innumerable common shares.

This working hard process does, in fact, bear fruit. The slightest little tidbit of information can tip a stock from a conservative hold to a strong sell. It is the hard work of bird-dogging and hunting for new knowledge that can give a fundamental analyst the necessary edge that he may need to attain superior returns.

Irwin A. Michael, CFA