You didn't enjoy it?Douglas wrote: ↑Sat Sep 16, 2023 5:05 pmhey Alex, I've logged back on after a long hiatus. I've actually mostly given up on active investing, I do just enough to keep me entertained and even then it is very small. I tried to focus on companies within my industry but even then I quickly got over my head. At the end of the day it is just easier to put the money into index funds and spend your precious time on things that are more enjoyable, such as going outdoors on an adventure.
Value Investing
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alex123711
- Posts: 58
- Joined: Fri May 15, 2020 8:33 pm
Re: Value Investing
Re: Value Investing
Why not both?
I've read 10Ks at the beach, in the woods, in the mountains...
Jokes aside yeah, it's not something everyone enjoys. But I do like that it's physically portable and that I can do it in a variety of nice places!
Re: Value Investing
What's your process after you read the 10k
Re: Value Investing
@ertyu
My process is not formulaic, but for stocks I buy I generally perform most of the following: read the most recent 10K & 10Q, read the earliest 10K and initial public filings if available, scan all of the interim years 10Ks (particularly for notable changes in the business model or large transactions), in many cases build a spreadsheet of all the summary financials and a lot of calculations of ratios and various things for all available years to observe ST & LT trends, read the company's entire website, read all available earnings call transcripts, review the proxy statement and dig into the background of the top management, the board, and active large investors, read other investor relations materials, study any industry information I can find, read customer reviews if available, read employee reviews if available, look for any other sources of information on the company that may be applicable or available, study all competitor businesses and materials (much of the above but less focus on certain aspects), study around the company's value chain to see how they fit into the broader ecosystem (customers & suppliers, etc.) read all investment write-ups I can find on the company, try to reach out to large vocal investors to discuss, sometimes ask clarifying questions to management/investor relations, sometimes reach out to people who are experts on part of the situation I can't get a grasp one, perform valuation, and complete a self-created checklist to fill gaps in my review prior to purchase.
In reality most companies I disqualify quickly from consideration and do nowhere near all of that, but by the time I buy stock in a company I've generally done most of that, and often more depending on the situation. The process is basically to try to rule out situations fairly quickly as it's a low return on time to do all that work for a company there is no chance I'm interested in based off initial negative factors, but at the start of the process I often look at summary financials (from a website like QuickFS) to get a feel of the general situation (but I am VERY skeptical of these kinds of sites, they very often get things wrong, this is just a starting point), I study the business model, and I do a really rough valuation. This tells me of this is the kind of business both numbers-wise and qualitatively that I'm interested in and whose price may be worth looking into more. And then I proceed through the steps in the prior paragraph to whittle the situation down to one I feel I grasp adequately to value, double check myself, and then if it is sufficiently attractive to warrant investment in rather than an existing holding, I buy.
To be clear though, of every 50 companies I come across I may only do all of that for 1. I consider intellectual honesty/circle of competence to be the prime meta skill of investing, and I just can't get confident on the vast majority of situations.
My process is not formulaic, but for stocks I buy I generally perform most of the following: read the most recent 10K & 10Q, read the earliest 10K and initial public filings if available, scan all of the interim years 10Ks (particularly for notable changes in the business model or large transactions), in many cases build a spreadsheet of all the summary financials and a lot of calculations of ratios and various things for all available years to observe ST & LT trends, read the company's entire website, read all available earnings call transcripts, review the proxy statement and dig into the background of the top management, the board, and active large investors, read other investor relations materials, study any industry information I can find, read customer reviews if available, read employee reviews if available, look for any other sources of information on the company that may be applicable or available, study all competitor businesses and materials (much of the above but less focus on certain aspects), study around the company's value chain to see how they fit into the broader ecosystem (customers & suppliers, etc.) read all investment write-ups I can find on the company, try to reach out to large vocal investors to discuss, sometimes ask clarifying questions to management/investor relations, sometimes reach out to people who are experts on part of the situation I can't get a grasp one, perform valuation, and complete a self-created checklist to fill gaps in my review prior to purchase.
In reality most companies I disqualify quickly from consideration and do nowhere near all of that, but by the time I buy stock in a company I've generally done most of that, and often more depending on the situation. The process is basically to try to rule out situations fairly quickly as it's a low return on time to do all that work for a company there is no chance I'm interested in based off initial negative factors, but at the start of the process I often look at summary financials (from a website like QuickFS) to get a feel of the general situation (but I am VERY skeptical of these kinds of sites, they very often get things wrong, this is just a starting point), I study the business model, and I do a really rough valuation. This tells me of this is the kind of business both numbers-wise and qualitatively that I'm interested in and whose price may be worth looking into more. And then I proceed through the steps in the prior paragraph to whittle the situation down to one I feel I grasp adequately to value, double check myself, and then if it is sufficiently attractive to warrant investment in rather than an existing holding, I buy.
To be clear though, of every 50 companies I come across I may only do all of that for 1. I consider intellectual honesty/circle of competence to be the prime meta skill of investing, and I just can't get confident on the vast majority of situations.