I could really relate to that fact that sell side research is just charts and charts which rarely mean anything. However, the real insight is : "In theory, a multiple is shorthand for a DCF, but it is commonly used out of convenience, leading to investors being blithely unaware of the assumptions that their multiples imply. Most commonly, the multiple makes implicit assumptions investors would be uncomfortable with were they to be explicit." It is shocking how many sell side analysts will write 30 page reports and have literally paragraph or few lines on valuation saying "Our price target for XYZ is based 13x 2023E earnings".
What I strive for as a self-taught investor summarized with your words: "Lastly, we do not use a bunch of jargon, but instead write as if this is the reader’s first encounter with many of the industry terms or concepts...Our philosophy is to write as if we are learning this for the first time, in as simple as possible terms." I've observed that the more I learn about a subject, the better I can explain it in simple terms.
I could really relate to that fact that sell side research is just charts and charts which rarely mean anything. However, the real insight is : "In theory, a multiple is shorthand for a DCF, but it is commonly used out of convenience, leading to investors being blithely unaware of the assumptions that their multiples imply. Most commonly, the multiple makes implicit assumptions investors would be uncomfortable with were they to be explicit." It is shocking how many sell side analysts will write 30 page reports and have literally paragraph or few lines on valuation saying "Our price target for XYZ is based 13x 2023E earnings".
What I strive for as a self-taught investor summarized with your words: "Lastly, we do not use a bunch of jargon, but instead write as if this is the reader’s first encounter with many of the industry terms or concepts...Our philosophy is to write as if we are learning this for the first time, in as simple as possible terms." I've observed that the more I learn about a subject, the better I can explain it in simple terms.
Thank you, glad it resonates with you!
Thank you for sharing your wisdom!
Great approach! As an sell analyst I was frustrated for the dynamics you describe.
Thanks! Yeah there's a lot of non-investment perogatives that constrain you