Читать книгу The Little Book of Investing Like the Pros - Joshua Rosenbaum - Страница 18

Step I focuses on how professional investors source investment ideas. This process requires a great deal of patience and discipline. It is not uncommon to review dozens, or even hundreds, of companies before a high-quality opportunity is discovered.

Our book focuses on bottom-up investing, which is a company-first approach to identifying attractive stocks. You start with the individual company and perform in-depth analysis on its business drivers, financial performance, valuation, and future prospects. We also discuss the top-down approach, where you search for opportunities based on macroeconomic (“macro”) or secular themes. Key top-down strategies center on identifying global or domestic market and business trends/cycles, and buying the beneficiaries. The flip side is to avoid or even short the victims.

Experienced investors tend to incorporate elements of both bottom-up and top-down in their approach. For the bottom-up investor, paying insufficient attention to important macro and other big-picture trends is dangerous. Similarly, the successful top-down investor can't ignore fundamental analysis for individual companies.

In Step I, we discuss the primary buckets from which professional investors source their ideas. We start with undervalued companies for whom there is a path to improved financial performance or a higher valuation. We then focus on companies undertaking value-enhancing corporate actions, such as mergers & acquisitions (M&A), spin-offs & divestitures, restructurings & turnarounds, stock buybacks & dividends, IPOs, and insider buying. Lastly, we explain how to track proven investors to help source new ideas.