Coburn Ventures Podcast #105: Four Components of Stock Picking Meets the Question Underneath the Question: "What to Do in Today's Market?"
Jun 30, 2022
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Four Jobs of Stock Picking
- Stock picking can be broken into four components: business analysis, valuation analysis, market psychology, and portfolio structure.
- This framework helps investors focus where needed during chaotic market times.
Psychology Dominates Market Moves
- Market movements often reflect valuation changes and psychology, not new business news.
- Investors must lean heavily into understanding market psychology for the next 6 months to 2.5 years.
2008-09 Market Divergence Experience
- In 2008, quality stocks and structurally weak shorts diverged sharply, providing a clear investment edge.
- In 2009, the market reversed, favoring lower quality stocks for nine painful months, defying typical quality assumptions.