Why i dont like stock recommendations and targets in research reports
1. They give an impression to new investors that there’s a way to predict stock prices and time frame
2. Theres no info on position sizing
3. Out of 100s, you may execute 20-30. Pure luck and selection bias. If you want to execute more than that then buy the index.
4. Stock tips were born through recos probably. Tips are nothing but a poorer cousin of recos.
5. They make you monitor your portfolio every day in expectation of target being met
6. Once target is met then what? It gives an impression that this ride is done and one needs to find a new train to ride.
Rather focus on
1. Accouting and governance quality
2. Growth prospects
3. Valuation
4. A simple system to size - each stock not more than 10% and not less than 2% of portfolio
1. They give an impression to new investors that there’s a way to predict stock prices and time frame
2. Theres no info on position sizing
3. Out of 100s, you may execute 20-30. Pure luck and selection bias. If you want to execute more than that then buy the index.
4. Stock tips were born through recos probably. Tips are nothing but a poorer cousin of recos.
5. They make you monitor your portfolio every day in expectation of target being met
6. Once target is met then what? It gives an impression that this ride is done and one needs to find a new train to ride.
Rather focus on
1. Accouting and governance quality
2. Growth prospects
3. Valuation
4. A simple system to size - each stock not more than 10% and not less than 2% of portfolio