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Robert Mckee's avatar

Love the reference to econometrics, an activity which you rightly mention provides valued research between company to company. A small change which I feel is missed in this activity is that information is usually derived from current company financials and results are consolidated to arrive at conclusions such as XYZ is "normal" for this industry due to economic downturn etc.. what is missing however is the extent of the downturn of company A Vs company B.

The inclusion of this data may still position both company's in " Normal " however the downturn of company B is above the average for the industry, whilst company A may be recovering and if growth continues will see a move away from normal to perhaps "good".

Neither Normal or average should be seen in isolation, but utilised to create a more comprehensive "Normal" by means of a north star average. Both however will require historical oversight for this to become reality. A small but relevant change would provide improved information flows for investors.

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