Now that we have delved into the Psychology of Investing and started crafting an Investment Philosophy, it’s time to put it into action. The Investment Process is the cornerstone of my own investing journey. It enables me to distill down the overwhelming task of sifting through approximately 60,000 publicly listed companies globally into a manageable amount.
An Investment Process comprises the steps you follow to generate ideas, research, value, and then buy opportunities. It should be a systematic, reproducible, and consistent approach to implementing your philosophy and strategy.
All investors must come to terms with the relentless continuity of the investment process.
Seth Klarman
The investment process includes all the pieces of the puzzle such as strategy, valuation, reading financial statements, and portfolio management. However, I have divided each of these core areas into separate segments and focused primarily on the overall process in this section. This is because each of these other factors deserves their own in-depth pages, not just how they integrate into the process.
A sound Investment Process can help you avoid errors by sticking to logical decisions, as opposed to being driven by emotions. It enables you to concentrate on your highest conviction ideas to achieve your long-term goals, i.e., your WHY you invest which guides the WHAT you invest in which will shape the HOW you invest. Let’s get started!
