Equities investors focus on the Income (Profit & Loss) statement - how much you make?
Corporate bond investors focus on the Balance Sheet statement - can you pay me back?
Some corporate bond investors and peer-to-peer lenders have found out the hard way the differences between making secured and unsecured loans...
Have you seen the title deed to your property? The smart bank is "safe keeping" it for us until we have paid our loans in full. So very the kind of them!
As a minority shareholder, especially if you belong to the camp where you believe that makes you part owner of the listed company, does earnings matter to you?
Warren Buffett has famously said he does not understand gold - it has no yield.
How do you value an asset that does not generate any yield? Can't use Discounted Cash Flow can you?
And yield is just another word for earnings.
Now comes the tyre hits the road moment.
What if I tell you earnings don't matter for equities?
Will you swallow it hook, line, and sinker?
But its free info!
Excellent! You are awake!
You know the Singaporean retort if you complain about your losses after following "free" advice:
"If I tell you to jump off a bridge, would you jump?"
But I'm kind. I'll give you a refund.
You paid me "nothing"; I'll refund "nothing" in return.
There! Happy now? Take "nothing" and go.
P.S. For the record, I disagree with Warren Buffett's view on gold. If you share Warren's view, I'll be most glad to be the karang guni man to take all the worthless pieces of yellow metal off your hand.
I'm generous. I'll give you in exchange my e-book valued at $88.88 retail for absolutely nothing at all!
What good is conviction if we don't act upon them?
Singapore Man of Leisure (welcome to my blog; just google it!)
