We are all exposed to a variety of information all the time and some of it is interesting because we had not thought out it. One method to think about assumptions is from Aswarth Damodaran  who teaches Business Valuations at the Stern School of New York University. Mr. Damodaran has posted a number of his talks on You Tube and If you like buying  new companies reading Mr. Damodaran’s blog will save you money. Much of valuation of newer companies is based on assumptions and for each assumption there needs to be the Impossible, the Possible and the Plausible. This will save you money because when you read someone’s analysis you can see what that will mean in the future. It is safe to say many research reports are nearer impossible than the plausible. Besides the numbers, you can relate the story the person tells about the company to the numbers. The story means what business is the company in or what is it not in.

A fiction book titled the Columbus Affair by Steve Barry published by Ballantine Books, NY 2013 asks the question what religion was Christopher Columbus? Most of the history books do not tell us and most of us never asked, because it turns out Columbus never really told anyone and Columbus was not likely his real name. In the book the Columbus Affair, the assumption is Columbus was Jewish. At the time of his life the Spanish Inquisition was in full force. A brief background is Spain was run by those with a Muslim religion or the Moors. The Christians and Muslims fought wars and the Christians took control of Spain under King Ferdinand  and Queen Isabella. They decided anyone who remained in Spain had to be Christian or Catholic nation, the choice was to convert or die or leave. The conversion process is known as the Spanish Inquisition – in US terms think of the McCarthy hearings are you a communist or not? It was understandable that people converted at least in public. In the year 1492, Spain was not a rich country and the theory is some or most of the financing came from the formerly Jewish people because they were looking for lands that were not under Christian control. Eventually Spain brought back Mexican and Peru gold and silver to become the richest country in the world.

When Columbus went on his journey in 1492, there was no priest however there was a a rabbi. Why? no one really knows. Columbus wanted Jamaica for 150 years, why Jamaica?  except there are wonderful hints that Columbus had a past and did not want it to be known, but he was likely Jewish. The book is a exciting thrill ride, but is it impossible, possible or plausible?

Linking to dividend paying stocks, the results you receive had better be plausible or error on the side of caution. There are many challenges to a wide variety of companies and as an investor you have to decide whether they are impossible, possible or plausible. We have seen industries grow where many had not thought they would but with barriers to entry and the reason why the companies you own bring in cash, the answer tends to be clearer. We go through our days reading and absorbing information on all types of subjects – deciding whether it is impossible, possible or plausible will make your decisions easier.

There are more questions than answers, till the next time – to raising questions.