Investing is about the numbers and narrative behind the underlying businesses that make up a portfolio.
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In the world of investing, we often find ourselves engrossed in numbers: revenue figures, operating margins, FCF returns, and ROIC ratios. These metrics provide us with valuable information about a company’s current and past performance. However, they stop short of revealing the true essence of a stock’s potential: its future.
Examining a company’s impressive revenue growth or strong operating margins may initially seem promising. But the real quest lies in understanding its narrative: a story of growth and prosperity yet to unfold. To discover the hidden gems capable of generating returns of between 10 and 100 times, you have to delve deeper into the company’s business model.
The journey of a long-term investor
To embark on this journey, you need to understand the complexities of how a business generates revenue. It’s similar to looking into a crystal ball and trying to predict what awaits us in a year, five, or even a decade. Investing in this type of stock is essentially a bet that its value will skyrocket, fueled by a business that is sure to expand substantially.
This process may seem daunting, but it is essential. Understanding a company’s revenue generation model allows us to identify growth catalysts and imagine how they may evolve in the future. It allows us to evaluate whether the company can enter new industry segments or capitalize on a growing market, solidifying or increasing its market share.
Examining the company’s management team, its background, incentives, and internal alignment provides more information. In an era where disruption is developing at an unprecedented pace, a competent management team is a valuable asset.
The importance of a story.
Beyond the numbers, it is the narrative that holds the key. It’s about believing in the company’s story, backed by solid research and data, that gives investors confidence in the potential for remarkable returns – between 10 and 100 times.
Now I understand that doing all this research can be overwhelming, but fear not. Here at Money Cog, we specialize in this precise endeavor.
We analyze numerous companies, saving you the legwork, and present our findings with our unique Gear Score to identify stocks that we believe have the potential to multiply your investment. Since 2015, our stock insights have generated a staggering 798% return, which translates to an impressive 29.4% annualized return. Find out more here.
Edited and verified by
Master of Science Zaven Boyrazian
Zaven has worked in various industries throughout his career, from aircraft factories to game development studios. He has been actively investing in the stock market for the better part of a decade, managing over $1 million across multiple portfolios.
Specializing in corporate valuation, Zaven uses a modern version of the principles established by Benjamin Graham to find new opportunities at fair prices.