Which companies should Preston and I analyze for you?
By Stig Brodersen
10 November 2016
I’m currently reading the book The Lean Startup, which is one of the best startup books I’ve read in a long time. Actually, it is so good that we’re going to review it in a podcast episode before too long. Not just from reading the book, but I’ve realized lately that while Preston and I might still see The Investors Podcast as simply “running a podcast,” we might soon need to reevaluate our perception. With the various projects that we’re working on (including software, online courses, and a team that seems to expand rapidly), we might soon need to think of The Investors Podcast as a “startup company.”
One of the things that I learned reading through The Lean Startup is the concept of “validated learning.” It’s simple. All startup companies (and I guess companies in general) have their theses about which products and services their customers like, but they base this on their own assumptions and not on facts. If something goes well, for instance, they sell more of a product. It’s easy for the engineers to think it’s because they added a new feature, whereas the marketing team might claim it’s because of a brand new campaign they just launched. When things turn bad, however, it seems like everyone’s pointing their fingers at each other. In the end, whether things are good or bad, it doesn’t solve the fundamental problem: How do we know?
There are a lot of different steps in validated learning, but the first step is basically to ask the customer. Ask what they want, and then track and measure everything to make sure that the company delivers the best possible product.
So why am I telling you all of this? I really don’t like the idea of addressing the TIP audience as “customers.” It has wrong connotations to it. If that was the case, the more than 100 emails I get a week asking for advice would make me a customer service person rather than a person providing free information for kindred spirits! But I like the idea of providing as much value as possible. For instance, I previously asked the TIP audience what they liked, mostly for the episodes, and they wanted us to talk about the current market conditions. So we decided to focus more on that. Since we’re doing the episodes anyway, why not focus on what the listener wants to listen to?
So this is where I need your help. I need your help in making me take the first and second step of validated learning. Not too long ago, I wrote a blog post called The Future of The Investors Podcast Part 2. In that blog post, I mentioned various projects that the team behind TIP has been setting up recently and which projects we might continue with. Perhaps, it was the blog post or perhaps, it was something completely different. But the feedback we got on our two courses The Intelligent Investor and How to invest in ETFs have been outstanding.
Especially, creating the latter course was a good experience. I feel that ETF investing is an important transition for newer investors that would like to start investing without risking a significant amount by picking a bad individual stock. I personally wish I had looked into ETFs before investing individual stocks. Not only would I’ve not lost that much money in the early days(!), but it’s simply a less complicated way to invest.
Still, if you look at my inbox, I’ll say that the ratio of questions between individual stock picks and ETFs is easily 10-1. It seems like people really want to learn more about individual stock picking. Preston and I have thought a lot about how to respond to this need, and we’re considering creating a course where we take you through the entire process of analyzing and valuing 10 different companies.
To continue our validated learning process, we would like your personal take on which companies you want Preston and I to value for you. We’re thinking to create a thorough A-Z video lesson for each stock. I came up with some of the stocks I imagine you would be interested in a valuation of. But if you have other suggestions, please feel free to add that in the comments below the post.
We’ve come up with three categories of stocks where we will take most picks from, and then one or two picks in the small to mid cap segment as well. The plan is that Preston will do 5, and I’ll do 5… but which stocks should we analyze?