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Paying Your Dues

Published on 24/09/2020

Research, research, research. At the end of the day that’s what it’s all about. Any investor, portfolio manager or analyst will tell you the same.

Due diligence is how you don’t get caught out, you have to look behind the facade, uncover the facts and make well reasoned decisions based on your findings.

You can conduct due diligence on any stock using readily available public information. Just a quick search will give you reams of research, now you just have to make the time (and enough coffee) to go through it all.

You want to look at the company’s numbers, and compare these numbers over time, as well as compare them to their competitors’ equivalents. You’ll want to check the management team and share ownership, stock price history, and consider the risks, as well as many other things

The same due diligence strategy will usually work on a variety of investments and stock names, but you may also want to focus in on company specifics (have there been any scandals or mismanagement?), and sector specifics (are there any law changes in the pipeline?).

Some key questions you should ask yourself in the due diligence process are:

  • How can I lose money with this investment?
  • How will this investment help me achieve my objectives, both personal and within my portfolio?
  • What is my exit strategy?
  • How does this investment make business sense, i.e. what is my return on investment?
  • How does this investment affect the risk profile of my portfolio?

Each investment idea will give different answers, and each investor has different risk appetites, so will draw different conclusions from the information uncovered. It’s about what works for you, and for your goals.

Well this all sounds very time consuming… so luckily whether you are an analyst, portfolio manager or investor, the Upside ecosystem can help you with your due diligence journey.

For idea creators on the Upside ecosystem, we will nudge and guide you to input as much information as you can about your reasoning behind why this stock name is a great investment, helping you develop due diligence skills and display it so investors can make the most informed decision when buying your ideas and portfolios.

For investors we have made everything as clear as possible, so looking for your next investment idea could be as simple as browsing for your next movie to watch. The Upside Marketplace is tailored to an investor’s specific requirements: the landing page suggests ideas or portfolios to suit as well as the best selling ideas or portfolios, but investors can also filter to suit their risk appetite and a large number of other factors.

Each investment idea or portfolio is presented like a playing card, with all the relevant information on the font: sector, region, risk, conviction and so on. Investors can then click into these to see further detail about both the idea or portfolio, but also the user’s history on Upside.

Here at the investment ideas lab, we understand the importance of covering your bases, and know there is a science to being right.

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