How to keep learning in free time
Any suggestions on good ways to spend free time when work is slow to make yourself a bettter investor. Modeling courses, books, personal investment research, networking?
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In my opinion what you can do in your free time to learn about the industry is to network and read as much as you can. Also you should try to stay up to date with the trends of the industry by subscribing to either WSJ,FT,BARRONS or BLOOMBERG. Good luck !
I would be mindful of reading mainstream financial news as it is filled with lots of noise.
Unless you are already experienced enough to filter through incessant sensationalist headlines and identify underlying implications of where we are in market cycle or identify the formation of secular or industry specific trends, daily reading of “financial news” is the same as scrolling through your Twitter feed.
Read to develop understanding of select industries, frameworks and mental models that will help develop your own investment process.
Focus on learning by doing, not passive reading,browsing or pre-selected material that may or may not be relevant.
I’ve found the best way to keep learning is to review real world retrospective investment case studies and ask one simple question: “How did this company create or destroy value.” Then move on to build your own forward-looking investment cases. Learn by looking backwards to identify future trends.
Repeat 1000x’s.
That's Eddie Lampert style right there
Could you pls provide an example of retrospective investment process or advise where is the best place to look for such information? Thank you
Example: Take all or a select few 10x stocks within the past 3-5 year time frame and do a case study on all of them. Go through all filings in the time frame, earnings calls, initiation reports and think about why the company was able to generate so much alpha. Overlay key events/ news over the stock chart. You can even try to model it out from the start, but not required, might be too consuming. Make sure to focus on what the bear thesis was and why the bulls ended up being right. Think long and hard about why the bear thesis was not able to be justified. What are the similarities between all these stocks/businesses? These questions about why these stocks outperformed should be the central narrative of these retrospective case studies. Vice versa for shorts. After 50 of these practices, you'll start seeing patterns that will help with identifying future winners. Looking backward is like doing practice test questions, resulting in higher quality, forward-looking analyses.
There are many variations to this, but the point is to keep thinking about the value creation and destruction process. Also, recommend making this part of an informal investment journal. Being able to articulate your views of the value creation/destruction process will make your future pitches much better.
something like this: https://static1.squarespace.com/static/5aaacb57506fbe4636414126/t/5f85c…
Also check out Yen Liow’s Youtube channel. He has a pretty cool vid on the case study methodology he uses
Honestly it all depends on your investment philosophy/style and the types of securities you are trading. But I would highly recommend reading up on investor psychology to understand market valuations better. You can learn all of the technical stuff in the future but starting early to understand how markets react to information can save you a lot of time in understanding the potential disconnect between your own investment ideas and the market. I would recommend reading books like inside the house of money, mastering the market cycle, market wizards etc to gain a perspective to how well known investment managers deal with markets.
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