“An investor’s task is not to predict the future but to properly analyze the present.”
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
I received an email from Steve that makes a good point:
“I suggest that an investor’s task is to properly analyze the present in order to make a reasonable projection of the future. After all, investing is about delaying the gratification of spending money now, in order to have greater gratification in future.”
My response:
Thanks Steve,
I agree with you that the whole purpose of investment is to derive a future benefit.
I think his point is that we cannot accurately predict the future. Instead we should map out multiple scenarios, based on available data, then position ourselves to benefit from the most likely while protecting ourselves as best we can from others.
The best example I can think of is lithium miners. We buy lithium stocks because they are likely to benefit from increased EV production but we also consider that, if there is a breakthrough in hydrogen fuel cells, existing demand for lithium in other applications is likely to continue and would limit the downside.
Regards,
Colin