Complex systems are not reductionist. Along time dimension too.
Wonderful write up Anand. As a professional investor, strongly endorse your sentiments. This is amongst the most honest pieces as well as amongst the best pieces I have read by an Indian author on investments. Thank you!
Again a superb write up ... thanks a lot for writing..
The problem arises when we take a long term plan/view (say 5 or 10 years) and then try to break it into quarterly figures which would be disastrous. Similarly if we take one quarter performance matrix and try to extrapolate it into long term plan/view (again, say 5 or 10 years) we are bound to get wrong results.
Often, it should be bottom up approach for operational matrix and top down approach for long term vision and strategy and periodic alignment of both the plans into a singular plan/view.
I think folks who have run/managed a business inherently understand this point about futility of going for precise quarterly estimates. Most analysts/investors do not have that experience and hence find it difficult/frustrating to grasp this. After having managed a large, complex business myself, in my investing, I focus more on quality of the business (competitive position in its industry, long term ROEs it enjoys) and quality of management (in terms of how well they manage whatever challenges comes along the way of running/growing their business and maintaining/growing their competitive position).
Fantastic. Your cricket analogies are always on point. XD
Good to learn how you analyse business performance.