My name is John Lennox, I was born with an entrepreneurial streak and a passion for learning. I began studying stocks in 1998 with my father, while in high school; and opened my first brokerage account in 2000. As a business major in college, my coursework included economics, accounting, finance and investment analysis. It was there I learned how to evaluate the macroeconomic environment, contraction and expansion of the money supply, banking, and institutional finance. My investment analysis coursework was solely focused on determining investment objectives, acceptable rates of return vs risk free rate of return and the time value of money. Stock and bond return potential was based on fundamental analysis of the business’s earnings prospects and underlying conditions of its industry. I learned about asset allocation, risk management, diversification, SEC reporting requirements and tax strategies. The extent of my education on technical analysis was limited to a paragraph noting its existence whereby investors analyze price patterns to forecast price movement (amateur’s view of technical analysis).
I was fortunate in my young adult life to have the opportunity to manage several high net worth portfolios near seven figures. I was the good student/manager.My investment theses were sound, I assessed macroeconomic conditions as a measure of systemic risk. I analyzed company financial statements, 10-Q Quarterly Reports, 10-K Annual Reports, and listened to all the conference calls. I was a believer in the “random walk” theory of price behavior, and spent all day, every day watching price action, news, tracking economic calendar events, earnings announcements, and constantly re-calculating forward price-to-earnings ratios of companies and industry competitors to determine solid investment entry points for excellent businesses. This all sounds good to well-intentioned people willing and able to do the hard work of finding great investment opportunities. I mean, of course irrational exuberance exists, but the stock market is an efficient valuing mechanism based on underlying conditions of the business and economy; RIGHT?