Sharing Research
I just want to write a short intro to describe what I want to do here primarily. As my investment philosophies & strategies have evolved, my investing analysis has got simpler over time. Not because I’m getting better at it, because I realized at some point that poring over the massive amounts of data I was consuming, was putting me in no better position in terms of my returns. So I continued focusing on what I could find the most data to support, legendary investors’ methods, metrics correlated with long-term business strength, psychological traps I could avoid and/or take advantage of, etc.
I started with Buffet and Lunch books so fell into value investing first, it just made sense to me. Every bit of data I’ve seen in the last decade has convinced me that buying quality companies when they’re the most out of favor (low P/E) provides not only better returns, but with higher yield, and less volatility. They’re already roughed up, the margin of safety is usually significant. I’ve very rarely taken losses employing this strategy over the prior 5-6 years. 3 to be exact. 1) Carnival, bought right before Covid; 2) Citi, sat on it for more than a year, and 3) The MJ cannabis ETF. All decisions that I learned from, and none of the 3 meet my quality standards used today. I continue to learn and study wins and losses equally, while continually reading books that add USEFUL knowledge to my brain, not like financial media most of us consume daily. I read dumb crap forever, it’s irrelevant. I pay attention obviously, but more than 90% of the data I used to consume, that I THOUGHT gave me an edge, did no such thing, and now I’ve seen the science to back up my own experience. It just gave me a false sense of confidence, like the professionals in the study, while not improving my accuracy or results whatsoever.
So I won’t be writing extravagant write ups on companies, but I will be sharing the results of the screens I’ve built. Some screens are based on parameters most important to a certain legendary investor, others are the results of screens based on mental models I’ve developed using financial, growth, & profitability metrics to screen for quality, then screening for value, relative to current peers and it’s own historical valuations. I use absolutely ZERO forward looking anything. Past results don’t guarantee future results, but I’ve seen the data that proves past results are a more accurate indicator of future trends than the estimates of an emotional (human) analyst.
To be honest, the growth & technical investors will find my posts mostly useless, but if you’re a value investor, you have just found an excellent source of quality companies. I make it rain. And we’re going to get wealthy together😉
I thought I was slick and had all these sweet strategies I’d developed with the help of my books. Then I came across John Neff and David Dreman. Turns out, my methods have been around for decades, people just like to make things hard🤷‍♂️
One last note, one thing that has helped me tremendously with this type of investing is that I have removed 98% of the emotion. I will still let my feelings get involved, if and when, I have reason to do so wisely (or have increased my odds of success to an acceptable level). Usually due to having long-term faith & intimate knowledge/experience in the industry (Solar, cannabis, crypto in my case). Using the methods I utilize removes my ego & emotion form the selection process. I don’t get in the way until it comes time to allocate position sizes, then the human has to take over. But the robot like nature of my investing and analysis has protected me from getting in my own way for the most part since those earlier mistakes.

Don’t want to get booted and lose this post so I’ll share the first screen right ASAP.

John Neff’s 2:1 Total Return:P/E screen coming right up. These are companies whose FWD earnings growth + dividend yield are more than twice the value of the P/E ratio. Indicating an out of favor stock likely to outperform the market. Just a list of interesting list of hopefully a few new companies to analyze🤙
Stanley's avatar
Nothing wrong with some self reflection. I appreciate your posts and look forward to your more focused approach!
Stock Metal Investment's avatar
Great that you found your strategy. I've only been around for 2 years so my strategy is still very much evolving. Looking forward to that rain you talked about haha
Eric Messenger's avatar
@stonkmetal if you want some recommended reading I have a post about it. We all shared some of our most influential readings😉, can go to my profile & posts if you’re interested.
Stock Metal Investment's avatar
@wall_street_deebo Will do, I love me a good book. So far "100 baggers" by Chris Mayer and "The outsider CEOs" by William Throndike were my absolute favorite investing books.
Conor Mac's avatar
Love the background here, thanks for sharing :)
Nathan Worden's avatar
Context like this is great— everyone should give an overview like this of what they’re trying to do and how.