104: Good Research Takes Time (Bonus: Buffett Video)

A behind the scenes look at my process updating research on a company and some advice from Warren and Charlie

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Research

I spend a good amount of my time doing research and writing (one might say writing *is* thinking/research). This week I spent time working on an update on Heineken for Watchlist Investing Deep Dives subscribers (I expect to send it out next week). My process includes tracking my time, something I try to do without letting the time tracking influence my work. In other words, I set the timer, do the work, then look at the results. I don’t try to race the clock.

Process

My process for updating Heineken included the following, in no particular order:

1. Reading my last analysis/write-up to remind myself of the key drivers and key goings on of the business so I’d know what to be attuned to when looking at new data.

2. Downloading the latest half-year report from the Heineken IR website

3. Manually updating my Excel “spreads” with the latest company financial data and other key metrics such as volume and detail on geographic areas

4. Reading the last conference call transcript

5. Listening to the latest investor presentation and take notes

6. Looking up certain items referenced in the material, including press releases on acquisitions, etc.

Not every update I do takes this same path. It’s a general template I follow trying to put myself in an owner’s shoes and suss out the key information necessary to have an informed judgment on the company.

After that’s done I take to paper (Word) and write an update for paid subscribers. My new format, which I’ve structured in ValueLine-like fashion (see below), is subject to a self-imposed limit of two pages. That includes graphs and tables.

What I’m trying to do is digest a lot of information and distill it to the essence. If I can’t do that in two pages (roughly one of text) then I probably don’t understand it well enough. Here’s an intentionally blurred screenshot of the first update, on Hingham Savings, sent out about a week ago.

Time, Time, Time

The Hingham update took me about 2.5 hours. The Heineken update will probably take about 4 to 5 because it’s been a while since I’ve looked at it. And that doesn’t include time “off” doing other things but thinking about the material.

One of my goals in sharing my work with Watchlist Investing is to reduce the time it takes subscribers to truly get up to speed on the latest developments in a company.

Doing it right takes time, there’s no way around it. You can’t get the same quality of information from a clickbait article or some article that spurts off statistics from some computer output - whether written by a human, auto-generated, or perhaps written by AI.

And there’s certainly no way one analyst can keep up to date on hundreds of companies and do a good job at it. I’ve intentionally limited myself to no more than 53, and even that might be too many.

Here’s Warren and Charlie talking about how long they take to read financial reports:

Anyway, I hope you’ve enjoyed this behind-the-scenes look at my research process. What does your process look like? How much time do you typically spend on a company?

Stay rational! —Adam

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