Summarising a company’s business and its performance in 25 words, the maximum number that will fit in the Annual Results Report, highlights the importance of choosing words carefully. The wrong words not only mislead readers, but demonstrate the writer is misleading himself.

Today tenses are vexing me. I’ve discovered I tend to move the past into the present. Companies publishing results today are talking about events that happened in the year ending somewhere between the end of March and the end of July 2012.

A company may have grown turnover, profits, earnings, cashflows, and /or dividends over that period, which may have started over a year and a half ago and ended over six months ago. But that doesn’t mean it’s growing. It grew.

Glancing, very briefly, over the performance of the Thrifty 30 portfolio, updated today, I noticed how Metalrax and French Connection (both down 50% or more) are holding the portfolio’s performance back.

Except, they’re not, necessarily. They have reduced the portfolio’s performance. Right now that could all be changing (I’m not saying it is!)

There is some justification for moving the past into the present. Improving (or deteriorating) business fundamentals, like profits, tend to persist just like improving (or deteriorating) share prices. In the absence of any information to the contrary, a company that grew recently is probably still growing.

We don’t know it’s still growing though. Share prices and fundamentals have momentum but the longer the period that momentum must last, the more likely change will happen. For value investors thinking three to five years ahead, or indefinitely even, moving the past into the present is complacent.

The fact a company grew begs the question, will it continue to grow? The inference the company is growing does not, at least with a similar level of urgency.

It’s a small point, maybe, but I think nasty surprises await value investors who move the past into the present.