Forum Topics Investment research routine
Nnyck777
2 years ago

@mcgeady10 I hear you it can be tough. Your availability and dedication will ebb and flow and that is ok. We all have lives and busy patches. I listen to finance podcasts in spare time / driving / walking / gym etc… Stay in your circle of competence and more importantly, your interest. If it’s not interesting to you it will never stick - well that is my view. Follow a couple of great people / finance writers / Twitter feeds. Strawman is a great place for a screen of companies you might like the look of. Have an investing hook. I personally like to see directors/ managers buying and eating from their own table. Simply Wall Street can highlight recent management purchasers. Have many companies on your watch list - read reports when you get a chance. Ask questions here. There are a group of savvy people here that I like to look to for opinions on a company I am interested in. I like when someone challenges my thinking. I have learnt a lot on Strawman. But after the baby giants podcast I am rethinking the wisdom of the crowd and thinking about that evolutionary split in human choices, wondering if we are designed to make countering decisions so that we all don’t march off a cliff or ‘stock cliff’ at once (last weeks episode of baby giants podcast very entertaining:)

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GazD
2 years ago

Yes that 80/20 experiment on statistics and population behaviour was fascinating

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mcgeady10
2 years ago

For those like myself who are doing stock investing in your free time, what does your research routine look like? I have just started a family and have found it a challenge to set time aside to do research/analyse/keep track of any new developments for the companies I hold.

How do you stay disciplined in your approach? Any tips would be helpful!

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Seasoning
2 years ago

When i can stay awake i pick one company to spend a little bit of time (1 hour or so) a few nights a week.

checklists are very helpful because it allows you to pick up where you left off.

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Bear77
6 months ago

In prior years @mcgeady10 I have sacrificed a fair bit of sleep to do company research because the middle of the night is about the only time I am unlikely to be called on to do something else. We have a teenage son still at home and we've just lost half of Friday and much of Saturday just trying to sort out his games PC after he upgraded to Windows 11 and then couldn't play one of his favourite games (Valorant), then the computer stopped talking to the monitor after a couple of peer-recommended BIOS mods, and the latest issue is that it's been looping for over 12 hours now trying to downgrade back to Windows 10 - occasionally displaying the BSOD and an NTFS File System Error in the fine print at the bottom of the screen for about 3 seconds before rebooting and looping around again - I've downloaded and printed 9 pages of things to try tomorrow that may fix it, otherwise we'll have to take it in for repairs Monday. We can't get it to go past the "reinstalling Windows 10" page, we can't even install the OS from a USB flash drive. All to do with corrupted NTFS I reckon, but that's a problem for tomorrow...

What I'm trying to say is that I agree 100% with what @Nnyck777 said about how our "availability and dedication will ebb and flow and that is ok. We all have lives and busy patches." and the suggestion of listening to podcasts when we can, like when driving, and staying within your circle of competence, and within what interests you because I agree that it's a LOT harder to find time to do stuff that doesn't interest you, and a lot easier to find time to do stuff that does. I know you asked this question about a year ago or more, but I just found the forum thread and I thought it was a damn good question.

I won't discuss my research routine because it's totally bonkers and all over the shop. I am VERY interested in certain sectors, like the gold sector, most mining, mining services, engineering companies, IT that I can get my head around, and really high quality companies across a diverse range of sectors where I can understand their business model, their competitive advantages, and they tick a heap of boxes for me - which has to usually include significant insider ownership (by either most of the Board and Management or key members at the very least) - I love founder-led companies where the founder or the founder's family still own a decent chunk of the company and run it like owners, making decisions that are in the long-term interests of the company and its shareholders. Decent ROE. Low, No, or very manageable debt, preferably net cash if they're small. Growing EPS. I won't go on. These sort of companies excite me and I don't find researching them to be boring or something that I want to put off - I look forward to finding some time to do some more research.

I also like to keep a written investment thesis for every company I have a serious look at and consider for inclusion in a portfolio, even if I don't end up buying any. I can look back later at why I chose not to buy them and see if my concerns were valid and if I made a good call or a bad call. And for ones that I decide to take a position in, I can look back periodically at the reasons I said yes, the expectations I had for the company, and the risks I had chosen to keep an eye on, and reasons why I might sell, and keep myself honest - not allowing too much "thesis creep" when things start taking longer than expected or aren't playing out exactly as planned.

Strawman.com is a great place to share such theses, and receive constructive feedback from the community here. If I haven't thought of at least one reason not to buy a stock before I decide to buy it, I haven't looked hard enough, so other people pointing out things I may have either missed or misunderstood is welcome and is often very helpful in achieving a more balanced view of a company - looking at both the pros and the cons.

So often my contributions here are rewarded with being brought (hopefully gently) back to earth because I was clearly missing something, or I was making poor assumptions. I can get my "work" critically appraised without constantly being worried about losing my job over it. And in terms of questions, the only truly dumb questions are the ones never asked. People are usually willing to help out here with stuff as basic as the meaning of an acronym through to explaining how something usually works from the POV of somebody in the industry.

So Strawman is a great tool for (a) writing down your theses, (b) getting feedback, (c) asking questions and getting answers, (d) learning new stuff, and (e) keeping yourself honest (looking back at what you've written previously, and having others do the same; some of my stuff has NOT aged as well as some other stuff I've written.)

I find that from a risk perspective, the time you can make available for company research should be directly proportional to how many companies you should hold, with the caveats that you probably want to hold at least 10 companies for diversification of risk, and you probably don't want to hold more than 30, because then it's more diworsification than diversification - i.e. if you hold 50 companies and one triples its share price, it doesn't have much impact on your portfolio balance. However if you hold three companies and one of them drops by 80%, or goes bust, that's a big hit. That's assuming the holdings in those hypothetical portfolios are all of roughly equally weight (same size positions), and of course that's not usually the case, even if they started out that way, but hopefully you get the idea I'm trying to communicate, which is don't hold too few, don't hold too many, and try to keep the numbers closer to 10 than 30 if you don't have much time to do research. Or whatever works for you.

You have to find what works for you, but the reason I hold between 25 and 30 companies across my portfolios at any given time is because I'm prepared to spend between 25 and 30 hours some weeks - a lot less in some others - doing research, including on companies I already hold to make sure they're still among my best ideas and still have significant upside potential.

That said, one of my New Year's Resolutions is to get more sleep this year, so I better go do some of that now.

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Strawman
6 months ago

Well said @Bear77

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