I’ve been reading a book by Peter Lynch called ‘Beating the Street’. The book is an autobiographic approach to investing and it brings up a number of interesting approaches to investing.
One tenet of investment according to Peter Lynch has been ‘focus on the company, not on the stock.’ I suppose he meant to encourage investors to read balance sheets and financial reports instead of looking only at stock charts or reading the annual highs and lows of the stock price.
One way to approach buying stocks has been to treat it like you’re buying a business. Although I don’t have experience acquiring companies, I would imagine it requires a thorough analysis of the annual expenses, revenues and tax costs compared to a handful of years. Fortunately, financial reports give investors the opportunity to review these metrics.
According to ‘Beating the Street’, Peter Lynch used to take his analysis one step further and reach out to investor relations representatives, company executives and stock analysts to compare his own research too. He made an effort to demystify the metrics he was measuring. Is this an approach available to the average investor? Maybe. Investor relations sections of company websites usually have a contact number made available incase investors have any questions, I would suppose.
The goal for Canadian Dough’s portfolio will be to investigate the metrics of small to medium sized companies in Canada or the United States. These companies may be listed on the S&P 500 or some other index. More information coming as Canadian Dough’s research carries forward. Thanks for reading!