@lyndonator I find myself in exactly the same position thanks to both DRO and exiting some underperforming holdings. I want to fewer companies going forward and have higher conviction / return potential. Your post is a good nudge for me to get into it.

I have been considering what would make a quick list of questions to use as a screener without having to sink alot of time into research. I will post once its developed.

I have started on Strawman as well for my starting list of companies. My current list is as follows:

AIM, CUP, C79, CLG, MIN, RCE, LBL

Good luck with your hunt.

@lyndonator - I'm thinking that some companies aren't so much trying to solve a problem as develop and roll out a much better solution to a problem that is already being solved, so the "build a better mousetrap" business model. Which works when there are mice that people want to catch. For instance C79 has developed (or more accurately the CSIRO has developed and C79 is commercialising) a much better way to assay drilling samples for gold, silver and copper - compared to the existing fire assay method - C79's method is more accurate, much faster and is cheaper at scale, so much more expensive to set up the equipment, but because their business model is a leasing arrangement where users pay by the test it never works out more expensive per test, but is only worth converting when you have a LOT of tests to run, in terms of whether it's worthwhile for Chrysos to install the testing equipment - with each unit worth millions of dollars. To be clear, there is NO downside to converting to C79's Photon Assay testing (from Fire Assay) as long as you are going to be doing a lot of testing, so their TAM is restricted to the larger gold and copper mining companies and testing laboratories, which is still a large enough market but is capped at this point, so it's easy enough to map out their profitability on the basis of how fast they can continue to roll out (build and install) these units, which are large and expensive, so they aren't going to be rolling out hundreds of these per year. Anyway, that's just one example.

Another is Mader group (MAD) - there are already labour hire companies that can provide heavy duty plant mechanics, but Mader specialise in this niche area of heavy duty earthmoving and mining equipment maintenance and repairs, so what they offer that others don't is experience and reliability, which is very important when these machines need to be running most of the time because downtime for their owners can cost them thousands of dollars per day, or even per hour in some cases. So companies use Mader because they want things fixed right, and they want things fixed rapidly, and they want these machines to not break down again because of faulty or shoddy repairs, and Mader are known for using genuine parts (although they do give you options) and doing things correctly the first time. They can charge a premium because of that reputation, and that's what makes the business so profitable, and able to expand and grow into new geographies. Reputation and Performance.

Anyway, just thought I'd mention that it's a thing - that some companies aren't out there trying to solve problems (that had no previous solution) so much as providing superior outcomes or superior solutions, and these business models can be equally effective in terms of profitability and growth.

@lyndonator would be keen to hear/see your thoughts on EMV. I’ve held as a growth opportunity for a while but struggling to put a bow on what a fair valuation would look like once they hit commercialisation.

And presumably what price you should pay ?

ATM. I have plenty of great companies i want to invest in but very few that are priced correctly.

Also, there are lots of great Australian wines that are unbelievably cheap, and I keep buying “investment “ cases - for the future……some of which need sampling (for quality control purposes, of course)

c

And of your list @lyndonator , I only currently hold PNV in my SMSF - and here on SM I hold PNV, C79 and MAD. PNV and C79 look like good buys to me here, and I plan to add more of both to real money portfolios in July/August. I haven't looked closely at EMV, BTI or BTX, but I do like TechOne (TNE) - they just always look fully valued - like PME do - or probably valued for future growth already priced in - but TNE is one where the founder has stepped back, handed the reigns to someone else, and the company is still kicking goals, so it's certainly a good SMSF stock - just keeps growing within their core demographic, they never seem to get disrupted too much, and have only had one serious stouch with a client (Brisbane City Council) that I know of, so very good, very sticky software that works well and their customers are unlikely to move, and another company that has succesfully transitioned to a subscription model to lock in recurring revenue, so lots to like about TNE. Never seems cheap, but just keeps on growing.

By the way, your checklist is a really good one to use as a template for a written investment thesis for these sort of companies - or any company really.

• What is the problem they are trying to solve? What are their products and what do they do?
• Who are their customers? How do (or will) they create a moat with these customers?
• Who is their competition?
• How well will they scale? What is the TAM for their products?
• Who are the management team? Do they have skin in the game?
• What are the risks and challenges ahead for them?
• Summing up, what is the thesis? When would I sell?

I like that a lot - I would change the wording of the first one to "What is their business model and why is it going to work?" and add "What are their products and what do they do?" as a second question, and a few other minor changes - so this:

• What is their business model and why is it going to work? [What is the problem they are trying to solve and/or product/process that they are improving on?]
• What are their products/services and what do they do?
• Who are their customers? How do (or will) they create a moat with these customers?
• Are their moats (or moat) sustainable and growing or shrinking? So how easily could they be disrupted?
• Who is their competition? Where does this company sit in the pecking order within their industry? How do their competitors view them?
• How well will they scale? What is the TAM for their products? How quickly can they address and service that market (likely timeframes, longeivity)?
• Who are the management team? Do they have skin in the game? What is their track record with this company and/or with previous companies they have managed, especially in terms of capital management and TSRs (total shareholder returns).
• What are the risks and challenges ahead for them?
• Summing up, what is the thesis?
• When would I sell?

But yeah, pretty much what you said @lyndonator !

And yes, @Chagsy - the question "What should I pay?" or "How much am I prepared to pay?" has to be part of it also.

Just thinking about Mader (MAD) and their business model revolving around reduced machine downtime for clients through superior and reliable repairs and maintenance - that is actually quite similar to LaserBond (LBL) in terms of their coating tech that significantly increases lifecycles and reduces wear, so also reduces downtime and breakdowns due to parts lasting longer (taking much longer to wear out or wear down). Mader obviously have a LOT of traction with their business model, while LaserBond are much more of a slow grind - they'll get there, but progress is a lot slower and they have to make people aware of what they are offering and why it is superior to other coating technologies available.

Mader have spread through word-of-mouth mostly - everybody in earthmoving and mining wants to have any "edge" that assists them to reduce costs and increase production or productivity - so there's a lot of looking over the fence at what the next guy/operation is doing, so when people embrace positive change in mining in particular, it tends to spread through the industry fairly rapidly, especially when it's just a matter of changing a phone number and ringing a different company.

So LBL have a similar business model selling point for part (a decent chunk) of their business, but we should expect industry adoption to be less rapid based on experience to date with LBL compared to MAD. It's more of a longer-term investment thesis for LaserBond I reckon.

The other difference is that there is a fair bit already priced in with MAD, and not a lot (in terms of future growth) priced in with LBL at current levels from my POV. Which is why I'm more attracted to LBL than MAD at these levels.

Took longer than I hoped but got the first one done for Polynovo - for those interested head over to the PNV page

@Bear77 Would much appreciate your critique - I tired to keep it concise, but also as complete as it needed to be.

@Chagsy Yep, next thing will be to create a valuation - then that will aid in the decision to actually buy or not. That last piece after that is assessing it in terms of my portfolio.

@Bradbury This is getting even more important as I'm thinking to trim Droneshield once again...

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

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.

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.

Well said @Bear77