How to Research Like a Pro (Even If You're Not One)

Dear Fellow Investor,

Remember when I mentioned my GameStop adventure in our investment vehicles discussion? Well, let me tell you what I should have done before buying. Today, we're building a research process that works – no finance degree required.

The 15-Minute First Pass

Before diving deep into any investment, I spend 15 minutes doing a quick check. Think of it like speed dating for stocks. Here's my checklist:

1. The "Explain It to Mom" Test Can I explain what this company does in one sentence? If not, that's a red flag. Example: "Apple makes phones and computers that people love to buy again and again."

2. Numbers at a Glance

   • Is revenue growing?

   • Are they profitable?

   • How much debt do they have? If any of these answers surprise you, it's time for deeper research.

3. Simple Google News Search Any major red flags in recent headlines? Spend 5 minutes here, not 5 hours.

The Deep Dive Process

If an investment passes the first round, here's where we roll up our sleeves:

1. Understanding the Business

• What problem do they solve?

• Who are their competitors?

• What's their competitive advantage?

2. Check the Numbers I use Yahoo Finance (remember our tools discussion?) to look at:

• Revenue trends (3-5 years)

• Profit margins

• Debt levels

• Cash flow

3. Read What Others Think

• Bull case (why people are buying)

• Bear case (why people are selling)

• What are the main risks?

My Personal Red Flags

Here's what makes me walk away:

• Can't explain the business model clearly

• Declining revenue with no good explanation

• More debt than they can handle

• Management that overpromises and underdelivers

• Too much hype, too little substance

The Research Journal

This is my secret weapon. For every investment I research, I write down:

• Why I'm interested

• What needs to be true for this to work

• What could go wrong

• My target price to buy/sell

Real World Example

Recently, I researched Nike (just an example, not a recommendation). Here's my process in action:

1. Quick Take: "Makes sports gear people love and has strong brand loyalty."

2. Deep Dive: Found solid financials, growing digital sales, but some supply chain concerns.

3. Journal Note: "Interested because of brand power and digital transformation. Need to watch inventory levels and China market."

What's Next?

Next month, we'll explore market psychology – because sometimes the hardest part of investing isn't finding good opportunities, it's keeping your cool when things get wild.

Keep ascending,

Cash

P.S. What's your research process like? Share your approach – I'd love to learn what works for you.

DISCLAIMER: InvestorAscent provides educational content only. This is not financial advice. All investing carries a risk of loss. Always do your own research and consult qualified financial professionals before investing.