“Writing is 1 percent inspiration, and 99 percent elimination.” ~ Louise Brooks
This is an idea about brevity, so let me be brief.
StockScan is Safal Niveshak’s latest initiative where I will write and share to-the-point, one-page reports on listed Indian companies on a regular basis.
If you have been a reader of Safal Niveshak for long, you must remember how my idea of writing stock analyses has bombed quite a few times. So, I launched StockTalk 1.0, then 2.0, and then 3.0…but none could make it beyond a few weeks or days. If you think that’s due to my incompetence in analyzing stocks, you are right, and I am fine with that thought because you won’t expect much from this new initiative too. 😉
One big reason I never carried on far with my earlier such initiatives was that my business analyses were often construed as stock recommendations, and I found a lot of people acting on the same (and, of course, losing money). In fact, some curse me even now for a few old reports, despite my several warnings that what I wrote was purely entertaining business analysis and not serious stock recommendations.
Anyways, as I have also realized in hindsight, another reason I could not continue with these initiatives for long was that I often found the idea of writing long reports as cumbersome, after having done that for a few years in my job.
So, here comes StockScan, which is inspired by this report that Warren Buffett wrote in 1951 – The Security I Like Best . It was brief, to the point, and thus powerful and interesting.
Only that, through StockScan, I will NOT be writing about businesses I like best but ones that I have been reading about. And in case I write about the ones I like best, I will ensure that you don’t come to find that out. 😉
So, here’s the first StockScan report on V-Mart Retail, a business that I had first written about in the March 2016 special report for subscribers of our Value Investing Almanack newsletter .
Click here , if you cannot read or download the report above.
In all, this one-pager contains my thoughts on these most important points one needs to understand while analyzing any business –
- Business and industry overview
- Key drivers for sales growth and profitability
- Capital allocation track record and balance sheet strength
- Competitive advantages a business may possess
- Management quality
- Key risks the business faces
My experience suggests that trying to find out a lot of extra information about a business beyond what is mentioned above has the risk of leading you to just one thing – illusion of control , because you think you know a lot.
So, this is my effort to get myself over that illusion by eliminating the extras and focusing on just the most important things.
And as always, please don’t believe what I say or write here. You may regret later.
Statutory Warning: This is NOT an investment advice to buy or sell shares. Make your own decision. I do not own the stock, but my analysis may be biased, and wrong. I, Vishal Khandelwal, am a registered Research Analyst as per SEBI (Research Analyst) Regulations, 2014 (Registration No. INH000000578).