Creating an Investment Thesis [Podcast]

Subscribe

Uncover the vital principles of constructing an investment thesis—a fundamental aspect that numerous investors tend to neglect. This guide details the process of writing one, applying it for buy/sell choices, and showcases real-life instances: Alimentation Couche-Tard and BCE.

This is a reference tool for both beginner and seasoned investors, delivering insights for investing with transparency and confidence.

Unsure About Purchase Choices?

Whether you have funds available or are evaluating a portfolio that requires refinement, the DSR Investment Roadmap assists you in making informed decisions.

This all-encompassing guide answers typical DIY investor questions:

• What is the best number of stocks to own?
• When is the perfect moment to buy?
• Is it important to cover various sectors?
• What guidelines should influence my decisions?
• Which metrics are genuinely significant?

Instead of depending on assumptions, stick to a tried-and-true strategy that aids in constructing or refreshing a dependable dividend growth portfolio—methodically.

—> thedividendguyblog.com/roadmap

What You Will Learn

Significance of an Investment Thesis
It offers assurance and perspective. Lacking it, choices may turn speculative, resulting in remorse.

• Motivates you to clarify why you hold a particular stock.

• Helps prevent emotional decisions amidst market volatility.

• Removes ambiguity regarding buying, maintaining, or divesting.

The 4 Pillars of a Solid Investment Thesis
Mike elaborates on the methodology used at DSR, illustrating how it creates a well-rounded perspective of a company.

• Story – The elevator pitch: What makes this stock a part of your portfolio?

• Strategy – How does it generate profits? Can a child comprehend it?

• Growth Drivers – What propels expansion? Is it organic, through buyouts, or innovation?

• Competitive Advantage – How is the business protected from rivals?

Case Study: Couche-Tard vs BCE
By analyzing these cases, Mike illustrates the thesis structure.

• Couche-Tard: Clear strategy, robust acquisition track record, moving forward in EV charging, with a narrow moat.

• BCE: Strong competitive advantage and stable income but with flat earnings and capital-heavy operations.

Data Brings Understanding
Your thesis must be backed by figures. Go past stories—validate with statistics.

• Utilize the Dividend Triangle: revenue, earnings, and dividend expansion.

• If numbers do not uphold your thesis, reconsidering or divesting might be essential.

Evaluate Possible Drawbacks
A comprehensive thesis considers potential obstacles. Recognizing risks prepares you for appropriate responses.

• Company vulnerabilities (e.g., BCE’s debt, Couche-Tard’s dependence on procurements)

• Industry developments (e…<|vq_8921|>