Assets vs Earnings
Balance sheet or income statement?
Assets or earnings?
If you can generate earnings without assets, fine with me.
If your pile of assets isn't generating increasing profits, what stinkin' good are they anyway? Can Eddie turn Sears' assets into earnings? If not, look out below!
I'm an earnings guy. Assets generally depreciate, earnings generally increase.
If your business isn't overpriced at the moment, and your earnings continue to go up faster than the average, your stock price WILL outperform. How could it not?
OTOH: assets are much more stable than earnings. Invest in a high growth company and if the quarterly results or projections drop a hair, things can get really dippy, really fast. Assets go up and down nice and slow and steady and predictably. It's a smooth, safe, boring ride. Great for old folks. Great for recessionary times. Not so great for generating wealth in a growing economy.
I've got some nice value funds for stability. For my stock picks, I'm looking for zest. If that means volatility (and it do!), just close your eyes and hang on for the ride.