When Past performance Is a guide to future

This article made me think of this board.
Saul as our main ‘dealmaker’


I was able to read it without logging in but when I went back it asked for a login
Hope those that are interested are able to open it

Without reading it, I can say past performance is always an indicator to guide to the future. The only way it is not is if you buy a stock just at its IPO or before it starts to increase in value.

Otherwise, the one thing every great stock that ever existed in the world has had is great past performance. You cannot have a great stock unless it performed well in the past.

Thus looking at past performance is the #2 criteria in Rule Breakers (originally) if I recall.

The key to past performance is to understand whether or not it is based upon real business fundamentals or momentum, whether it is has hit a point in its business where it is a “tweeter,” stuck in the “chasm,” or is now at very real threat of being “disrupted”. I.e., will past performance continue.

Thus, if you want to cut the chase, look to stocks that have great past performance, relative strength, and that will narrow down your search considerably for new stock candidates.

You can always be a contrarian investor, like with Cloudera as was brought up here by SW. But I find it is best to be a contrarian investor on stocks that previously had great past performances, but that hit an identifiable rut that will be fixed. Much more difficult for a stock with little history to guide by.

Will mention in that vain, in the news today, just an example, this is Hortonworks with Talend: https://finance.yahoo.com/news/talend-helps-office-depot-eur…

I really do not know if each of these Hadoop type businesses partner with Talend or Informatics or what every time, or if it is a nice appendage for the sale. In HD Europe’s case (not affiliated with HD America I don’t think) they use Talend to effectuate their use of Hortonworks.