HERE IS THE PROCESS. AND WHAT YOU NEED TO KNOW
Stock investment research is a critical part of making informed investment decisions. The best way to do stock investment research is to follow a systematic and comprehensive approach that covers both fundamental and technical aspects of investing. Here are some steps you can follow:
Identify your investment goals and risk tolerance: Before you begin investing, it is important to understand what you hope to achieve and how much risk you are willing to take on.
Get a comprehensive understanding of the company: Research the company's financial statements, management, products and services, competition, and growth prospects.
Analyze the financial statements: Look at the company's income statement, balance sheet, and cash flow statement to assess its financial health and stability.
Assess the company's management: Evaluate the management team's track record, experience, and decision-making skills to determine if they are likely to lead the company in the right direction.
Analyze the industry and competition: Research the company's industry and competitors to determine how well the company is positioned in its market.
Look at technical indicators: Analyze charts and technical indicators to get a sense of the stock's price trend and support and resistance levels.
Follow market news and trends: Keep up to date on news and trends in the stock market and the economy as a whole to help you identify opportunities and potential risks.
Diversify your portfolio: Consider investing in multiple stocks or other types of investments to reduce risk and improve your chances of success.
By following these steps, you can develop a comprehensive understanding of the companies you are considering investing in and make informed investment decisions. However, it is important to remember that investing in the stock market involves risk and past performance is not a guarantee of future results. It is always advisable to seek the advice of a financial professional before making any investment decisions.
WHAT DOES THE COMPETITION LOOK LIKE?
look, investment research is an endless game. you can read for hours and learn nothing. or read for ten minutes and make a decision. there is no middle ground. so you need to decide when to make a decision.
for me, it comes down to 60-80% or 1%. what does this mean?
Colin Powell once famously said, "don't take action if you have only enough information to give you less than a 40 percent chance of being right, but don't wait until you have enough facts to be 100 percent sure, because by then it is almost always too late."
you see waiting will work best once you've made a decision. you want to get to the investment point as soon as possible. if you are new, that might a take a while, but an experienced investor can move fast.
let me explain the difference. to outperform the market, you need to be in the top percentile of an idea. let's say there are 1m people investing in a particular stock, you are really competing with the top 10,000 in that group. this group includes the best investors, the CEO, the executive team,
Learning about competitors is an important part of conducting investment research. Here are some steps you can take to gather information about a company's competitors:
Start with public sources: Begin by searching for information about the company and its competitors on publicly available sources like the company's website, investor relations page, and annual reports. You can also use financial databases like Yahoo Finance, Google Finance, and EDGAR to gather information.
Use industry reports: Look for industry reports and analyst reports that provide information on the company and its competitors. These reports can give you valuable insights into the company's position within its market and the strengths and weaknesses of its competitors.
Analyze competitors' financial statements: Analyze the financial statements of the company's competitors to understand their financial health, revenue streams, and profitability.
Follow competitors' news and developments: Stay up-to-date on the news and developments of the company's competitors by reading industry publications, following their social media accounts, and subscribing to their newsletters.
Attend trade shows and conferences: Attend trade shows and conferences related to the industry to get a firsthand look at the company's competitors and their products and services.
Visit the company's competitors: If possible, visit the company's competitors to get a better understanding of their operations and market positioning.
By gathering information about a company's competitors, you can get a better understanding of the competitive landscape and assess the company's ability to compete in its market. This information can help you make more informed investment decisions.
HOW TO READ THE NEWS. WHAT ARE THE VARIABLES YOU NEED TO LOOK FOR AND WHY THEY MATTER
here's my first tip: stop reading the news looking for information. use news to validate information. remember one thing, reporters are not investors. sure they can do investigative journalism but when was the last time you read such a piece. most news bites are clickbait at best. or teleprompters at best. the media is reading and rereading the same notes. no inference, no facts. only opinions.
second tip: media sites go an inch deep and a mile wide. they have no incentive to understand the details. they don't have a niche audience. they have a broad audience.
When reading stock market news, it is important to differentiate between signal and noise in order to make informed investment decisions. Here are some tips to help you filter through the noise:
Focus on credible sources: Look for news and analysis from reputable sources like financial news organizations, analysts, and experts in the field.
Consider the source's track record: Look at the source's track record and see if they have a history of providing accurate and relevant information.
Check for conflicts of interest: Be aware of any conflicts of interest the source may have, such as a relationship with the company or an investment in the stock.
Look for data-driven analysis: Look for analysis that is based on hard data and facts, rather than speculation or opinions.
Focus on the long-term trend: Try to focus on long-term trends and developments rather than short-term news and market movements.
Seek out multiple perspectives: Read news and analysis from multiple sources to get a balanced perspective on the information.
Ignore short-term market volatility: The stock market is subject to short-term volatility and fluctuations, so it's important to ignore noise and focus on the long-term trends.
By using these tips, you can filter through the noise and focus on the information that is most relevant and meaningful for your investment decisions.