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Two different people can go over a company's financials with a fine-tooth comb and each one reach a completely different conclusion. So, I think it's not so much how thorough your due diligence is, but what you find relevant and insightful and what you do not. This is key. For example, Warren Buffett read IBM's annual report every year for decades, but it was (apparently) a footnote about share buybacks that finally got him to pull the trigger.

But as Denny has so rightfully pointed out, all this does is chart the past...not predict the future.

If you subscribe to the revision to the mean, in whatever incarnation, this kind of information is relevant. It places a stock's current valuation in a historical context. Depending on the company in question, and what products or services it provides, it's a judgement call as to if the future is likely to rhyme with the past.

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