From the course: Corporate Financial Statement Analysis
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Limits to using past performance
From the course: Corporate Financial Statement Analysis
Limits to using past performance
- All right Kay, I understand you're a huge baseball fan. - Bit of a fan, that's right. - So what's your favorite Major League team? - Well that's easy, the New York Yankees. The Yankees are the most successful baseball franchise in history. As of the end of 2018, they had won more world championships than any other team, 27. The second most, the Cardinals with 11, less than half as many. And the Yankees' arch enemies, the Red Sox have only won nine World Series Championships. - So, how have your Yankees done recently and how 'about those Red Sox? - Well, okay the Yankees haven't won anything since 2009, and the Red Sox won the World Series in 2013 and 2018. - There you go, so when it comes to the Yankees, it looks like you're putting too much weight on old historical performance and not enough on more recent performance. For the Red Sox, two World Series in the past six years, that's not bad. - Okay fine, this is a financial analysis course ladies and gentlemen, so let's talk about…
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