Although I maintain a watch portfolio, I do generally buy after a stock hits my radar and I've done "a bit of research". And I mean a bit -- I generally don't require a lot of specific company knowledge before I establish a position. I usually follow the company more closely after I've started an initial position. I'm generally buying value stocks -- these usually have warts or problems where the stock is falling. I'll presume the stock might fall further after I buy, so I usually plan that I'll average down on the stock after I make an initial buy.
I don't need a lot of company specific knowledge to gain confidence before I buy. I've found the times I have done lots of research ahead of time or have somehow otherwise gained confidence in the company, my results haven't been that good. Consequently, now I'm almost never that confident of my picks. I mostly have confidence in the methodology -- low p/bk, low p/sales, p/cash flow, bv growth, low p/e, insider buys, high roe, high profit margin, and so on. |
