Nbspan application question which is about capital markets

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Reference no: EM13375591 , Length: 1311words

 an application question which is about "capital markets research" in accounting.

"Marcus Padley, a stockbroker, made the following statements in an article in The Sydney Morning Herald.
I love 'the Warren Buffet Way'. In fact, one of my first clients introduced himself by saying,' I am Fred and I'd like to invest the Warren Buffet Way'. Well whoopee do! What shall we do? Get the annual reports of the top 200 companies. Analyse the accounts of each, assets 'value' and then go to the stock market and find out that 'wow, i'm right and the whole market is wrong' and the share price is trading below the true 'value'. The purchase the shares and wait for that value to inevitably emerge.

In fact most Warren Buffett-based approaches are terrible at timing, which in reality is about the only thing that really matters. In an increasingly impatient market it is not just about 'what', it is becoming all about 'when'. Investors who sat through the 54.5 per cent fall in the market in the financial crises need to earn 113% to get their money back. That's 13 years of compounding average annual returns. Not caring about 'when' just cost us 13 years."

Critically evaluate the 2 statements made by Marcus Padley in the context of capital market research. 

Reference no: EM13375591

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