Paro_monty Authors Max Koh
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10 super simple steps to research a stock.
In just 3-4 hours:
Overview:
1. Find a sexy angle
2. Analyze the financials
3. Read the annual report
4. Get skin in the game
5. Read earnings calls
6. Understand the leader
7. Understand value prop
8. Read analysis by others
9. Monitor execution
10. Maintenance due diligence
Lets go!
1. Find a sexy story or angle
This is how I begin my research.
It starts with either:
• a product
• a story
• a founder
... that gets me curious.
I think stock screeners are helpful...
But I don’t use them.
I prefer to research companies that genuinely excite me.
2. Analyze the financials
I then proceed to analyze the numbers for the last 2-3 years.
Which is about 8-12 quarters.
Stuff like:
- Revenue growth
- Gross and EBIT margins
- Key customer metrics
- Free cash flow
Seeing the numbers tells me a story.
3. Read the annual report
If the numbers and story are exciting...
I dig deeper into the business through the 10K.
I want to understand the business model...
How they make money...
And the customers they serve.
A step by step guide for
In just 3-4 hours:
Overview:
1. Find a sexy angle
2. Analyze the financials
3. Read the annual report
4. Get skin in the game
5. Read earnings calls
6. Understand the leader
7. Understand value prop
8. Read analysis by others
9. Monitor execution
10. Maintenance due diligence
Lets go!
1. Find a sexy story or angle
This is how I begin my research.
It starts with either:
• a product
• a story
• a founder
... that gets me curious.
I think stock screeners are helpful...
But I don’t use them.
I prefer to research companies that genuinely excite me.
2. Analyze the financials
I then proceed to analyze the numbers for the last 2-3 years.
Which is about 8-12 quarters.
Stuff like:
- Revenue growth
- Gross and EBIT margins
- Key customer metrics
- Free cash flow
Seeing the numbers tells me a story.
3. Read the annual report
If the numbers and story are exciting...
I dig deeper into the business through the 10K.
I want to understand the business model...
How they make money...
And the customers they serve.
A step by step guide for
How to read an Annual Report in 1 hour.
— Max Koh (@heymaxkoh) April 4, 2022
A step by step guide for busy people: