1/n My investing process which is quite manual & achingly slow given that I get only a few hours a day & weekends
Rule1: Handwritten & filed in folders like below
Always have most of the documentation printed & filed. Ignore the stocks please.
2/n
Rule 2: An Investment checklist. Printed & filed in hand (snapshot below)
For the company in question as well as appropriate competitors
3/n
Rule 3: Have a Page 0. This I have learnt at work. I keep updating it if I come back to the company. Screenshot below.
Everything is given objectively as trend except the reason to reject the idea
4/n
Rule 4: Print out 4 pages (~65 questions) of a 'Moats Questionnaire'. I have compiled this from 2 sources Mauboussin & Dorsey. The public link is below
Rule 5: A Summary Journal which I fill after going through the Investment Checklist. Here I ask myself if I could short it then why & if I have to bet a significant portion of my net worth then why
6/n
Sources I use
AR
Inv PPTs
Concall transcripts
I have never attended AGMs & have rarely listened to calls. Time doesnt permit.
I go through VP forum & competition carefully.
7/n
I use my own WACC model but do have a ready reckoner of industry WACCs.
A screenshot below (ignore the nos). This is built completely using Prof Damodaran's methods.
8/n
I use screener download button to draw me up trends in all critical ratios as per me.
Also this excel model takes in WACC & tried to do a reverse DCF (rudimentary). Output is what is the EBIDTA growth market is pricing in?
Screenshot below (outputs sheets given)
9/n
Look at the charts on Tradingview/chartink.
I follow 2 simple things
Support
Resistance
That is all. Though someone still needs to prove all gaps are not filled 😉
10/n
Pray to God & start building a position which may take weeks & months sometimes.
The End.
Let me know your thoughts.
Here are the templates which I print & fill by hand.
Make a consolidated mail for them. And tag that mail in their inbox. For instance my wife has a tab "DV" & color code it. Do this for your sibling & parents if possible
3/ MY NSDL CAS statements get forwarded to my wife and her statement to mine. I have maintained sporadically though CAS statements in a google drive folder to which both of us have access. As investors your close ones should know every single investment you have.
Short notes from the book 'Dead Companies Walking' by Scott Fearon.
I think this is a must read book for all investors to understand when to stay away from a company even if you don't want to short it.
2/n Things go wrong more often than they go right. Failure is actually a natural - even crucial - element of a healthy economy. And the people who are willing to acknowledge that fact can make a hell of a lot of money.
3/n One of the most enduring & important business traditions is failure
1/n A look at the oldest companies & earliest traded stocks
The 1st stock exchange was established in 1602 in Amsterdam. It was made by the Dutch East India Company, chart below
The south sea bubble of 1720 can be seen. The company lasted under 2 centuries & finally went bankrupt
2/n Another company traded in Amsterdam was The Dutch West India Company which also went into bankruptcy in late 1700s. In the chart below we can see both the Tulip mania & the South Sea Bubble.
3/n But these two companies are no match for the oldest companies which exist till today. They could have merged. Some are listed via the new parent too. The types are:
2/n Being a govt doctor working on the field most of the time he rarely put in effort to do any detailed analysis. He tried his hand at a business & failed miserably. Went back to job.
His learning - give money to people who can run businesses efficiently.
3/n You can never create a business in 1-2 years. It takes decades. So why do you think you will make returns in a few months? He bought stocks with the expectation that for 5+ year nothing would happen.