New Idea Template

Prior to any idea generation, I would like to provide an introduction to how I see the “New Ideas” portion of this site working.

First, I will give a basic introduction to the company. How does a company make its money? Where does the company spend its money? How is the company positioned within its industry? These sort of questions are very simple, but ultimately, the stocks we are investing in are companies, and details like those above should not be overlooked.

Second, I will discuss my perception of market sentiment towards the name we’re discussing. The market’s present attitude regarding a specific stock is the reason it is presently priced where it is. If we can understand what that sentiment is, we have a much better chance of predicting the type of event that will cause the market to change its approach to a stock.

Third, I will discuss the future event(s) I see as “breaking” the market’s prevailing attitude towards a name. In this section, we have the opportunity to discuss how much upside a potential idea has as far as its total return in a given period of time. Ultimately, being right about the direction of a stock’s move is certainly helpful, but being right about the direction, timing, and magnitude of a stock’s move is how we derive exceptional returns.

I will polish things off with a concise conclusion, which will provide current price, target price, and target holding period.

Additionally, I will keep track of all “open” ideas – that is, ideas that have yet to hit their price target or end date.

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