< Go Back To Blog

Subjective/Objective

Sigma Investment Counselors

October 6, 2021

Subjective: based on or influenced by personal feelings, tastes or opinions.

Objective: expressing or dealing with facts or conditions as perceived without distortion by personal feelings, prejudices or interpretations.

In politics and academia, but not sports, there seems to be an increasing trend toward subjective evaluations when objective results don’t provide the desired outcomes.  That may work for many situations, but is not going to work for investors.

Never-the-less, some would be “investors” want to believe that wishful thinking, hype (by some managements, pundits and social media) and speculation based on limited and questionable information, can be a viable substitute for good old fashioned fundamental research.

Wrong!  Investment opportunities are based on a carefully researched assessment of a company’s future sales, cash flow and earnings, and a calculation of the present value of these future operating results in the context of current and expected future interest rates.

Successful portfolio decisions are generally based on the collective wisdom of investors and their advisor(s).

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA

Comments are closed.