The Amateur Investor Ep. 8: Telescope

As a teenager, I went to a boarding school in Brisbane, which afforded me a range of experiences, especially during the term breaks, when the boarding house would shut and my father would pick me up to while away the time backpacking up and down the coasts, both Gold and Sunshine. A favourite activity of ours was going to Hervey Bay on the Sunshine Coast to fish on the local charter boats. Over the nearly three years I spent boarding, we developed a close relationship with one of the charter businesses, such that they knew us by sight, the skipper, Craig, and I were on a first name basis. On one particular trip, he even took the time to teach me how to identify other ships on the water, how to read their markings and call them up on the local radio.

The purpose of this somewhat distracting analogy is to talk about something I’ve been trying to slowly put together; an apparatus for scoping out prospective companies for investment. I’ve been able to cobble together an investment thesis of sorts, but it’s not fully complete without an ability to pick where funds are allocated to put this thesis to the test. At this point, I only have a very rough idea for what I think is needed; A process for looking at a company’s market share of the collective industry, how to understand the books (which are quite easily accessible, it turns out) and how to gather information on the company’s internal movements; new products in development, management styles, new hires. That last category could go on, but it’s basically whatever other hidden detail that might provide good insight into future performance. Quite often I’ve heard of other new investors to the game who make broad predictions, often investing without putting in the work to gather the information to build a contingent plan, or to more importantly temper their expectations, insulate themselves from emotional decisions.

I’m currently working my way through a graduate course, taken up after my return from the States this year to try and better my career prospects, so this project has yet to grow any real legs, but let’s consider this the first step on the journey to getting that together. Hopefully by next week I’ll be able to present some meaningful information here rather than poorly crafted maritime analogies and saccharine anecdotes about my boyhood.

Till then,

Go slow, play small, learn the process