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Lindley Estes is a business writer for The Free Lance-Star and Fredericksburg.com. This blog is on Fredericksburg-area business. Send an e-mail to Lindley Estes.

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For wise investors, boring can be best

PREDICTING the future is an impor- tant component of any investment decision.

Analyzing a company’s current financial health relative to its stock price is always the starting point. But a company is not a static thing, so you must also try to figure out how bright a future it has. Ultimately that will determine its stock price going forward.

Unfortunately, nobody has a crystal ball, and usually things that happen in the future only seem obvious in retrospect (see, for example, the recent housing bust).

This is another reason why Warren Buffett’s investment strategy–targeting businesses that won’t be drastically affected by changes in the future–makes so much sense.

Click here to read this week’s investment column.

Permalink: http://news.fredericksburg.com/businessbrowser/2009/05/24/for-wise-investors-boring-can-be-best/