there is a broader focus on diving deeply into specific books and topics with the goal of becoming well-rounded and informed.

Research is a different beast. Research is a proactive investigation of a particular topic. Throughout the investment process you need to know how to wrap your arms around a market, create a model for thinking about how a business works, and figure out where to go when you don't have any initial understanding.

Being a successful investor isn't about knowing everything there is to know about every area. The goal is to find a few "key insights." If you uncover something about a market that no one else has realized THAT is how you make truly exceptional investments. And you can only identify those key insights through research.

Identifying a Key Insight

"The only way to win is to work, work, work, work, and hope to have a few insights. And it makes sense to load up on the very few good insights you have instead of pretending to know everything about everything at all times."
Charlie Munger
Charlie Munger

Before beginning any research project it's critical to develop a guiding thesis. You have a question in mind or a particular belief and you're trying to gain information around it. As you set out doing research on a password management software company you might decide "passwords are going to become less important over time." Then set out to prove or disprove that thesis.

Rather than starting with one broad market and saying "I will learn" you limit the aperture to the most relevant areas to start with. "How do you eat an elephant? One bite at a time." Figure out the first bite. If you're researching a specific company don't start with "cybersecurity," spend time understanding a deeper relevant piece. "Identity and access management" is an easier subject to go deep on at first than understanding the entire security umbrella.

Create a framework or outline for how you think this market, product, or company works and fill it in / update it as you go. Below is an example of a "guiding outline" for the electrical utility industry. The words on the page aren't important. Just notice the way we've mapped out the different pieces: power generators to power transportation to power storage to power distribution. For any market you should start to form a mental picture of the value chain. How do all the pieces fit together?

Value chain of the energy utilities market.                                               A market map of key players
Value chain of the energy utilities market. A market map of key players

After you've created a framework to understand the market and tried to understand all the moving pieces your end result should be a clear list of takeaways:

  1. What I believe
  2. What questions I still need to answer

The Tool Kit

Part of the research process is understanding the resources that are available (see

below). Depending on what you're researching, there may be relevant specific data sets that you're not familiar with. There might be a data set out there that you would only care about if you're trying to understand the market for funeral homes.

Then there are the broad platforms (e.g. Google, YouTube, Twitter, and Reddit. "Strategic googling" can be one of the most important skills you learn because you're identifying ways to find answers to questions you don't have any context for. You're relying on other networks of thought to point you to resources you wouldn't have thought of before.

Tips and Tricks

  • How to "Google": Googling has become standard behavior for most people, but there is some nuance to finding the best resources for research
    • There are a number of investment banks, consulting firms, etc. that post industry reports on most markets. When you start researching a space, type in "[industry name] industry report pdf" and that will make PDF documents float to the top of the results.
    • As you read through high level materials, keep a list of key terms that are relevant to the industry. Refine your google search with the market and then that key word in quotations to make sure it's included (e.g. search identity and access management and "passwordless" in quotes)
  • Visualize and Internalize: Understanding a specific concept or even product can be easier to watch than to read about. YouTube has a lot of product reviews for some of these. If the thing you're researching has a product or service that you can see search for product videos to understand how it works in real life.


Research Tools

How do I do Investment Research?

How to Become Your Own Stock Analyst

What People are Saying

Further Reading

Research: Other Resources