Before going into the article, something personally important. I’m studying for a Graduate’s Degree in Finance and Economics, in Boston. I’m about to start my second semester and, when the third one begins, in January, I’ll be legally allowed to do an internship. I’m looking for an asset management firm that might be looking for someone that performs equity research, preferably in Boston or New York. If you happen to know of anything, I’d be really grateful if you let me know.
I wanna touch on one aspect you mentioned in the article.
I don’t think hundreds of hours need to go into researching a company for an investment. For such extensive articles like yours, yeah perhaps.
But for myself definitely not. I study companies deeply, take notes, and have my checklist and process.
Even though it’s a hobby for me, I don’t want to oversee the time I put into this stuff. In the end, the goal of a portfolio is to compound wealth to accomplish some long term personal goal. Therefore, it can be compared to work as there is money involved, too. So, I think that you need to somewhat "offset“ time spent researching companies in dollars (e.g., one’s personal salary) with the return you get. And then, there should still be some alpha - otherwise, why not just buy an ETF?
I doubt that this calculation is a profitable one for retail investors if they would spend hundreds of hours on a single company.
Just my two cents on the time spent aspect that you’ve mentioned, my man.
And w.r.t. management analysis, I think next to capital allocation metrics, watching CEO keynotes and interviews from the past is a great start.
I feel very identified with this one hahaha. I still have my first deep dive (which I deleted) saved in my unpublished posts. Straight up horrendous article, but I like to keep it there so that I can look back at it and see how much I've progressed since then.
Even to this day when I publish a deep dive, I acknowledge than in 1-2 years I might look back at it and feel somewhat unsatisfied with it, but I don't think that's necessarily bad, as it is a sign of progress.
Looking forward to reading your future research writeups!