In a world where information is disseminated almost instantly, markets have become quick to price in new information. However, Andrew Martin from Alphinity Investment Management says that they generally fail to appreciate the long-term implications of a change in outlook.

“One thing we love to see in sell-side research is ‘earnings have been upgraded by 5%, the stock’s up 5%, therefore it’s all priced in.” Martin says that investors should be asking themselves ‘why was there an upgrade, and what does that mean about tomorrow?"

In this interview, Martin explains how you can use the same approach to identify potential bombs, and why management gets it wrong too sometimes.