Digging into the details: understanding companies from the outside

Over the past several years, I'd like to think, I've become an increasingly savvy investor. As a result of the focus that I put on better understanding what really drives corporate results and how that gets valued in the markets over the long run, I've begun to achieve a pretty satisfying success rate. (Of course, recognizing that the market's done pretty well the past few years, I continue to evaluate this..)

One of the ways that I hone these skills is that as I'm reading about various companies I try to dig into the ones that play to areas I'm interested in and know something about. I find that over time, as I do this, I see a larger picture, an evolving story that tells me more about the company than what I could find from the conventional public reports and press coverage. This has led me to uncover companies from WebEx to Google. From Starbucks to In 'N Out. 

Every once in a while, this process uncovers a private company that I think is doing something pretty well and definitely has a no-brainer opportunity in front of them. When a company is private, you don't get very much detail and I like testing my ability to piece together the story on private companies with minimal data. Call it a mental exercise, but I find that it's really helpful to push my brain to think through the various scenarios that could be playing out behind the scenes. When the companies actually grow and go public (as I watched with Google) you get the satisfying, "nice, I was right" feeling, to boot.  As I learn to do this more successfully, I get to really apply these analytical techniques to the public marketplace, where I can actually take positions in companies that I discover. 

I've decided that because I do this relatively often and because I'm finding that blogging makes me be a bit more rigorous when sharing thoughts, I'm going to start talking through some of my ideas on this blog. Perhaps I'll turn up some promising public companies and maybe I'll alert you to some interesting private companies.  Hopefully, I'll occasionally really hit the nail on the head like I did when talking about the Blackberry Pearl last fall in a post titled, "Evolving the Mobile Interface". In case you haven't been watching, RIM's been on a tear, in large part due to the massive success of the Pearl and the subsequent releases of devices utilizing the trackball interface :)

So, tune in for my next post, where I'll discuss a private company that I've recently come across that I think has a pretty strong future ahead of it.

Technorati Tags: evaluating companies, business analysis, private companies, research and investing

Comments

[Jimbo]

Cliffhanger eh?

[Ben Hoyt]

Hahah. Yeah. Nice dramatic suspense. (Same bat time, same bat channel?)

Looking forward to hearing about it...

[Robi]

Got you guys on the edge of your seats huh :)? I'll make sure I get this post up quickly..