![]() ![]() This idea of a representative cross-section of a company is also called “the value chain” by the very well-respected business school professor Michael Porter, and it is key to truly understanding a business. The idea of collecting multiple vantage points through the representative cross-section of a company is one of the simplest yet most powerful ideas on effective research for investing. It is amazing what an accurate picture of the relative points of strength and weakness of each company in an industry can be obtained from a representative cross-section of the opinions of those who in one way or another are concerned with any particular company. The business “grapevine” is a remarkable thing. In particular I want to highlight the following section of the chapter: In essence, Fisher explains the process of scuttlebutt as talking to as many people as you can about a company that you are interested in a potential investment for. In the book, Fisher spends 3 short pages outlining “What ‘Scuttlebutt’ Can Do”. How Only Scuttlebutt Paints the True Picture of a Business Let’s get started on this simple but powerful method for finding great stock market opportunities today and over the rest of your life. Scuttlebutt Through Competitor Analysis.Scuttlebutt: The True Picture of a Business.And I’ll show you how even the average investor can apply it, even if you don’t have access to top managements in the companies you want to invest in. Today, I will attempt to show you why you should use a scuttlebutt investing approach to researching and picking stocks for your portfolio. Even Warren Buffett once proclaimed his investment approach as “15% Fisher”. Many very successful investors have credited Phil Fisher as the inspiration of their success. This book was one of the greatest investment classics of all-time, and was one I have included as a top 8 books on investing for many years. “Scuttlebutt” was a word invented by famed investor Philip Fisher in his bestselling Common Stocks and Uncommon Profits. Today, however, I think aspects of Philip Fisher’s chapter on “scuttlebutt” should be applied to every single stock you ever research.įirst let’s define what a scuttlebutt investor would do. ![]() He is a CWM charter holder and CFP marks holder.I’ll admit that I didn’t see the power of the scuttlebutt investing idea the first time I read it, probably seven years ago or so. He is an engineering graduate of Delhi University and earned his MBA in Finance & Strategy from Queensland University of Technology, Brisbane. In his previous stints, he has worked as a business consultant and analyst with leading MNCs and start-ups over diverse fields of Healthcare, Education and Retail. He has appeared on Moneycontrol, Jagran Business, Biz tak and various other digital first TV channels. He is regularly quoted by The Economic Times, Informist Media, Reuters and Morning Star. He has been a PMS and Smallcase manager as well. He had set up research desk at a brokerage firm across multiple asset classes. He believes Scuttlebutt, a primary research method employed, is critical to select good companies and weed out not-so-good ones. He is of the opinion that best stock ideas are often cracked by being on the ground - during travelling and talking to people. Amit Kumar Gupta has over a decade experience in investment analysis and portfolio management.
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