What Do We Mean By Change

The upshot — We want to identify changes important enough to change valuation. So we are looking for changes that affect a sector or a specific stock such that the relationship of money heading into the “box” relative to money coming out of the “box” is significantly altered.

Either the change causes the relationship of money into the “box” to money coming out of the “box” to improve or worsen.   It could be a new product cycle … a management change … significant share gains … business model restructuring …

So, If a company beats a quarter by a penny, we are interested to know if something significant is in the works.  If there is not, then we will let the traders do what they choose. That situation won’t match our philosophy unless we see an interesting and substantive fundamental change we suspect is lasting.