Core Molding Technologies (CMT) New Investor Deck is out and its Fantastic

 Definitely worth a read.

You can download it here.   PowerPoint Presentation (coremt.com)

I believe this company is worth $30/sh and not less than $24 and it trades at $15.  That value gap could close rapidly.

Earnings "Consensus" - and value

 Short post today - but a pet peeve - why do financial reporters refer to averages as "consensus"?  A consensus is a thing - it is when there is broad agreement, that is, it is a statement of FREQUENCY of observation, or a mode - an average of widely disparate values is not a "consensus", it is an average.  

If you, know, 20 people come to roughly the same estimate of something, then there is consensus - it expresses a statement about the level of confidence of the crowd; they all agree with each other at least.  Too often, though, analyst estimates are far apart, as when someone thinks they will earn $1 a share, someone else $2 and someone else $0.21.  The average of their estimates is $1.07, but there is no "consensus" that this is true.

I think the root cause of this is that the journalists are relying on a service that claims to produce "consensus" values, so they quote that like sports commentators talking about the NFL.

But even that, I think, is derivative of an economic concept that market prices represent the "consensus" view of the value of something.  Since price discrimination happens frequently, how much consensus their really is in markets is tough to say.  Auctions, like stocks, perhaps, settle at prices that reflect the aggregate willingness of buyers and sellers to transact business, but even that is not a "consensus" really.  This can be useful for understanding a solitary quoted market price, if that is your academic purpose, but in fact, there are still a range of values (most bids and asks go unfilled, but does that mean that their is broad agreement about the true "value" of the thing, or just that that is a place where at a moment in time a buyer and a seller were able to agree to do business, doesn't make it a consensus.  The assumption that what we are doing is just a stochastic and iterative pricing exercise is wrong, just as claiming that wildly divergent views represent consensus is wrong.  

Price discovery may be the goal of the AUCTIONEER or the student of auctions, but it is not necessarily the goal of the participant and quite frankly, the exact same asset can have quite different value depending on the circumstances of the buyer and seller.