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23-11-2023, 07:28 AM
I do not consider myself a newbie. Yet I spend considerable time looking at investment reports written by others. I group why I do so under the following.
Sanity check. All analyses are based on assumptions about the future. I look at how others have analysed the companies to see whether I have missed things. I like to compare investment thesis as a check against bias. You would be surprised how often I have come across investment thesis that is completely different from mine. Such thesis would recommend a buy when I think it is a hold or sell.
Valuation. Even though different analysts share similar views on the business prospects, they may differ in the way the companies are valued. They could use different valuation approaches. Some rely on relative valuation while I prefer DCF. Even with DCF, there are different models and discount rates. Looking at different valuations gives me a sense of the range of possible values. Think of it as some form of margin of safety.
Building blocks. There are many occasions where I build on the analyses provided by others. Rather than repeat what has been covered elsewhere, I cover a different timeframe or do a complementary analysis.
Investment decision. Sometimes, I just adopt the analyses provided in lieu of my own. I often do this when I am looking at markets that I am not familiar with. It is much faster to gain insights this way than carrying out a detailed fundamental analysis yourself.
![[Image: Slide7.png]](https://i.postimg.cc/8kZRTT1F/Slide7.png)
For more insights into investment case studies go to “Can we learn anything from investment case studies?”
Sanity check. All analyses are based on assumptions about the future. I look at how others have analysed the companies to see whether I have missed things. I like to compare investment thesis as a check against bias. You would be surprised how often I have come across investment thesis that is completely different from mine. Such thesis would recommend a buy when I think it is a hold or sell.
Valuation. Even though different analysts share similar views on the business prospects, they may differ in the way the companies are valued. They could use different valuation approaches. Some rely on relative valuation while I prefer DCF. Even with DCF, there are different models and discount rates. Looking at different valuations gives me a sense of the range of possible values. Think of it as some form of margin of safety.
Building blocks. There are many occasions where I build on the analyses provided by others. Rather than repeat what has been covered elsewhere, I cover a different timeframe or do a complementary analysis.
Investment decision. Sometimes, I just adopt the analyses provided in lieu of my own. I often do this when I am looking at markets that I am not familiar with. It is much faster to gain insights this way than carrying out a detailed fundamental analysis yourself.
For more insights into investment case studies go to “Can we learn anything from investment case studies?”