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No. of Recommendations: 6
Even though we all like to think that we have better than average insights into the market, we are often dealt humbling lessons. One of the biggest problems is that past performance of any company (no matter how strong) is not an exact predictor of future performance. I have a strong belief that companies that have a demonstrated history (3-4 + years) of rising financials and that also sell at valuations that do not adequately reflect likely future prospects will on average yield super normal investment returns. But I know that even strong proven histories are no guarantee, they just put the odds in the investor's favor.

This summer I spend part of my vacation reading Hewitt Heiserman's interesting book "Its Earnings that Count". One of the companies featured as a prime example of quality earnings (one that has forged an "earnings power staircase")was Apollo Group also discussed in this link:

http://www.thestreet.com/p/_rms/rmoney/earningspower/10133982.html

However since then Apollo Group has fallen on hard times with a stock decline of almost 50% from its peak including a pretty dismal earnings report this week.

The lesson here is not that Mr. Heiserman's model is wrong but perhaps that no matter how much analysis we do the future is unpredictable.

I have never owned Apollo (I have always been suspicious of "mill" education institutions - but that is probably more out of prejudice than reasoned thought).

I know that Mr. Heiserman posts on here on occasion. Just wondering if he had any thought on the decline of Apollo and if there was any way it could have been foreseen in time to avoid serious loss.
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