Pick a Good Business to Avoid Random Catalysts The Extrapolation of Short-Term Trends

Understanding the Past is Key to Understanding the Future

In general, the best thing for us is to find companies that have really stumbled, but where you can look at their past and understand why they are going to earn something much better in the future. That’s opposed to looking at a company like Amazon.com, for example, which might be a great business, but where understanding exactly what the model is going to be in the future isn’t easy. It’s a lot easier to look at the prospects for a railcar manufacturer, whose business has been the same for decades.
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