Views on Life & on Equity Investing

Wonder, Wealth & Abundance

How to generate equity ideas

with 3 comments

Land was the raw material for Agricultural Age,

Iron was the raw material for Industrial Age,

Data for the Information Age,

Information synthesis is the raw material for the Knowledge Age.

Equity Idea generation is the raw material for the Equity Analysts.

Before I go to the HOWTO, end goal must be clear.

End goal is to:

a) Not lose money;

b) Compound above inflation;

c) Improve the character and quality of the portfolio;

d) Leave a legacy.

If you start with 10,000 USD today, and compound at 15% CAGR via NGO/family/fund/institution for 150 years, your fund would have accumulated 13 Trillion USD, size of US economy. You would have achieved point d), you can actually influence the planet’s direction in many fields of human endeavor.

Investors focus on Rate-of-return but ignore Time dimension.

A-Z

Fortunately there are only 60,000 listed companies in the world (opposed to millions of unlisted) and Buffett suggests that you start with alphabet A. Read annual reports.

Blogs / Newspaper / Discussion Forums

Tailcoat other investors or take lead from existing news articles. You need to have superior information processing ability, which comes with time, so the same news article could mean alarm bells ringing in your mind or an idea of opportunity, when others do not take a cue.

Eg: Automated driving cars and pay-as-you-go model means real estate prices in CBDs will go down, parking buildings will be vacant.

Malls / Shopping / Consumption

Ideas can come from things you and your family already consumes. Movie hall, pop corn, cosmetics, food brands etc.

52 week high / low

This can be an interesting place as well, depending on your mindset as trader or investor.

Corporate Disclosures

Companies are required to make disclosures to the exchange. Its fact, not fiction or fabrication by a journalist.

Stock Screeners

This can prove to be useful if searching on quantitative parameters.

Post shortlisting of an idea, further research is required on the company. Half the people like to meet management and other half feel no need to (eg: Walter Schloss). I fall in the latter half. Over a 2-3 year period the management intentions are automatically reflected in their actions and corporate announcements. If you have a long horizon, then there is no need to meet management. I believe that you can find out more by doing industry research, phone calls, google search, scuttlebutt by calling as a customer, trade partner and competitors, going through past ten years of management actions than meeting management in person.

Disclosure: Views are personal notions and do not represent any organisation or company. Investment in stock market can (and many a times do) result in loss of principal capital.

http://www.elevendimension-funds.com

Written by amitdipsite

September 11, 2016 at 1:46 am

Posted in Uncategorized

3 Responses

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  1. Your investing approach is wonderful. Appreciate your sharp focus and dedication on Investing and Spirituality. Immensely enriching me. Glad to know you. ~ Balaji

    Eternal Seeker

    September 13, 2016 at 1:43 pm

  2. You would have seen the Reliance Jio launch and its potential disruption on Indian equities. The jio launch is bringing seismic change in internet usage/behavior in India. I am looking for books on “Companies benefited from US internet boom”. Even though it would not be same in Indian context, wanted to explore that theme. Also are you seeing any curious/tempting valuations on companies that could ride this phenomenon ?

    ~Balaji

    Eternal Seeker

    September 13, 2016 at 3:26 pm

    • Dear Balaji,

      Thanks

      Streaming meadia companies will be good, I have not spotted any opportunities as yet.

      Most of the action in internet space is in Private Equity and unlisted space.

      All the best

      amitdipsite

      September 13, 2016 at 10:07 pm


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