There’s a huge difference between forecasts and facts. They’re pretty much at opposite ends of the spectrum. You’d be silly not to realise that, wouldn’t you? I mean, this is completely obvious….. right?
Well, unfortunately, I’ve fallen well and truly into the silly camp on many occasions where I’ve unintentionally treated forecasts as hard facts. The future earnings numbers are there printed on the page, clearing away the fog of an uncertain future, so it must be true. Then given that this is going to happen, and based on the current stock price, this is definitely a good investment! Buy!
One great example of my ‘forecasts are facts’ mistake was with a little company called ‘Cool or Cosy’, [Read more...]