Legendary hedge fund TIGER Management created an "Investment Framework" to guide it's company research. This was later adopted by the amazing funds that make up the Tiger Cubs. Can't remember where I got a copy 20 years ago but here is THAT checklist. Part ONE today. 👇👇👇
Industry Study
■Is this a good business? What are the key success factors to superior performance in this industry? (Value Added Research “VAR”)
■Define the market opportunity. How do competitive products address this opportunity?
■What are the barriers to entry (“moats”)?
■Is this a good business? What are the key success factors to superior performance in this industry? (Value Added Research “VAR”)
■Define the market opportunity. How do competitive products address this opportunity?
■What are the barriers to entry (“moats”)?
■What is the relative power of:
■Customers ■Suppliers ■Competitors ■Regulators ■Who controls industry pricing? Does the company/sector have any pricing power?
■How (and how much) can a good company differentiate itself from a bad one in this industry?
■Customers ■Suppliers ■Competitors ■Regulators ■Who controls industry pricing? Does the company/sector have any pricing power?
■How (and how much) can a good company differentiate itself from a bad one in this industry?
■Do you understand this business? Test yourself and describe it to a ten year old. DO THIS!
Business Model (VAR)
■What is the selling model: razor/blades? services? one-off contracts?
■What are the economics of the base business unit? How does it stack up against competitors?
■Why is the company good (or bad) at what they do? Can they sustain it?
■What is the selling model: razor/blades? services? one-off contracts?
■What are the economics of the base business unit? How does it stack up against competitors?
■Why is the company good (or bad) at what they do? Can they sustain it?
■Is this company growing by acquisition? How sustainable is that?
■Be able to easily describe the entire sales process – from order to fulfillment.
■Be able to easily describe the entire sales process – from order to fulfillment.
Management (VAR)
■What is their background, and what do their former colleagues, investors, classmates, say about them? Have they been successful in the past? (Very important)
■How are they compensated? Are their interests aligned with shareholders?
■What is their background, and what do their former colleagues, investors, classmates, say about them? Have they been successful in the past? (Very important)
■How are they compensated? Are their interests aligned with shareholders?
■Have they been good at allocating capital?
■Are they buying or selling stock? How much as a percentage of their holdings, and why?
■Are they buying or selling stock? How much as a percentage of their holdings, and why?
Company/Cultural Issues (VAR)
■Is this a great company? Is it built to last? What could change this assessment?
■Can you imagine holding stock in this company for twenty years?
■Is this a great company? Is it built to last? What could change this assessment?
■Can you imagine holding stock in this company for twenty years?
■If you had access to unlimited capital, how would you feel about your chances of successfully competing against this company?
■Compare to a weak competitor in the same industry. What is the difference and why?
■Compare to a weak competitor in the same industry. What is the difference and why?
THIS research list 👆👆👆has been used by some of the MOST successful hedge funds in history. CHECK IT OUT and figure out how to incorporate it into your research. #stocks #investing
• • •
Missing some Tweet in this thread? You can try to
force a refresh
