Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
After reading IETC I had the same experience. Applying it to a few of my favourite hidden gems didn't give very good results. The way I explained this to myself is that it's most likely due to the fact that HG tries to identify companies early in their development so the power staircase pattern hasn't been established yet. But hopefully it will in the future.

One question is, once a company shows a power staircase pattern in its earnings, is it still a good time to invest in them?

And another: what are the statistics of companies that did show early signs of developing a power staircase but that turned out to be bad investments anyway?

I think the importance of the book is that the concept makes common sense. So applying the principles when looking to invest in a company seems like a good idea as part of your valuation toolbox. But to use it as a general guidance for complete portfolio construction I'd need to see a bit more substantiation that doing so leads to superior results. A lot more than just showing how good the picture looks for a few obviously successful companies. I have been meaning to look at this in more detail but simply have been lacking the time to do so.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.