Dear all,
the much awaited Full Equity Research section will start soon as I will be able to allocate time to it also. Some people call them ‘deep dives’, ‘investment ideas’, or ‘actionable ideas’ — in short, it will cover in full single businesses and their stocks!
I said businesses first, then stocks because the mindset is all bout about being a business owner, a shareholder of the business, and not of a ticker moving on a screen.
This is one of the most simple statements about investing, yet sooner or later the most forgotten by way too many investors. Mindset is as equal or even more important than the research and overall due diligence, especially as the portfolio value gets bigger:
research does the trinity: finds opportunities, builds conviction and lowers risk
yet it’s mindset, emotional control, patience, and independence that turns all that into enduring investment results — being able to stick to the strategy is key!
I will do the research & due diligence + occasional mindset reminders — both are key!
The first businesses that will be covered are planned to start in Q4 2026 or Q1 2027.
Until then, expectations wise, check below my Maverick framework as a preview. First, the Table Of Contents with key highlights, and then the ins & outs about all:
📊 Geographical focus: U.S. and Switzerland focus + Europe, Canada and Japan
📊 Business types: Owner-operators, monopolies, time tested business models
📊 Investment style: Value, Growth & Quality, Dividend & Royalty
📊 Research method: Hybrid with Bottom-up first, Top-down secondary
📊 Investment horizon: compounding through a medium-long term horizon
📊 Investment mindset: thinking as a shareholder, hence thinking as an owner
📊 Size: small & mid caps under covered focus, large and micro secondary
📊 Frequency: 1-6x year, possibly more, it depends on the valuation
📊 Research style and delivery: balancing simplicity with technicality and length
📊 Independence: very valuable and rare nowadays, full freedom here
👍 Takeaways: great companies, Skin In the Game (STIG), mindset
Let’s get started with more details on each of the key aspects from above:
📊 Geographical focus 📊
U.S. + Switzerland primarily, while secondary Europe overall, Canada & Japan = overall strong jurisdictions for political and economic stability, solid legal and regulatory standards, investors asset protection and ideally also tax efficiency
should value and opportunity to be found also elsewhere, going global also
📊 Business types 📊
A big focus on my Big 4:
Founder-led companies + Owner-Operators
High insiders equity ownership: managers, officers, directors, and employees, when not or as well (ideal) the firm is Founder-led/Owner-Operated
Key rationale:
businesses that are managed by their founders, owners and/or largest shareholders mean true Skin In The Game (STIG): financial + reputational + legacy
ultimate interests alignment with shareholders (Agency Problem natural hedge)
Natural Monopolies, Duopolies & Oligopolies
Key rationale:
pricing power, barrier to entry, a durable long-term business which has a solid ‘MOAT’ around its operations and inside the geography it operates in
the MOAT could be management & employees, their skills & Skin In The Game, it could be the infrastructure, scalability, patents, the tech, or a royalty business
after all, the value of a company = Present Value of its Free Cash Flow (PV FCF) it generates across time — hence, super durable cash flows are key!
Time tested business models:
time tested across the business cycle, at least one, and at least a big/full one: ignoring 2020 Covid which was a ‘pause’ rather than a recession
at least 20 years in business, as that would mean we include the 2007-2009 Global Financial Crisis (GFC) which was a big test for any business
hence, if a business did well since at least 2005 to now, that is a good signal and invitation (naturally, not a guarantee) that it will likely do well also in the future
‘past performance is no future guarantee’ as the saying goes, but on the other side a long track record says: customers are there, management is good, business could adapt across time, it is making money and delivering to shareholders (while a short track record can happen even in markets without any of these requisites)
sometimes, younger companies or even IPOs could be featured also depending what I find, and assess as potential good candidates — the ‘next hot thing’ can indeed turn to be hot, but have to be very selective as most do not turn hot
📊 Investment style 📊
Value, Growth & Quality stocks, together with their derivatives: GARP (Growth at a Reasonable Price) & QARP (Quality at a Reasonable Price)
Dividend stocks, REITs and royalty businesses as income investing
Nonetheless, I would not fixate at all on categorisations, let’s just recall 2 key takes:
“All intelligent investing is value investing, acquiring more than you are paying for.”
Charlie Munger
“Price is what you pay, value is what you get”
Warren Buffett
📊 Research method 📊
fundamentals, bottom-up: what are the core operations, products and services? how is Revenue generated and how is it spent? how is management? are there plenty of projects that will likely generate a positive NPV (Net Present Value)? How good is the business model today, and for the medium and long-term?
connecting the valuation to the economy via ✍️ The State of the U.S. Economy quarterly reports that you will find in the ‘Macro’ section
hence, overall a hybrid approach: Bottom-up at the core, Top-down secondary
why a hybrid method? nothing happens in a vacuum: knowing where we are in the business cycle is important as that connects to the overall Valuations in the market, the Macro-Finance bridge — it is one thing to buy/sell a stock when the economy & markets are hot, and another when in a recession and/or a bear market
📊 Investment horizon 📊
medium-long term horizon, hence a business owner mindset (not a traded ticker)
understanding the business before the numbers is key for a long-term view
📊 Investment mindset 📊
thinking as a shareholder is the way to build true conviction, otherwise with the first market wobbles (which will naturally keep happening) confidence will vanish — understand what you own, and why you own it
easy to forget for many, even experienced investors, that a share is not a ticker or lottery ticket ... it’s part-ownership of a business — we are here for the long-term
therefore, if after publishing a research report the stock goes very fast -20% and the research is labelled as ‘bad’, or if +20% and the research is labelled as ‘genius’ = that is clearly not the right mindset
sooner or later in your investment journey, your focus should be less on chasing glamorous businesses with fancy CEOs, slides, media overhyped — you should transition to more ‘simple’ & ‘boring’, under covered and not hyped businesses with great a great risk/reward ratio, ideally with a genuinely asymmetric upside — the tricky hard part is having enough patience to wait for the right price, comfortable when the price drops, and for the thesis to actually play out …
“The big money is not in the buying or selling, but in the waiting.”
Charlie Munger
“You don’t buy or sell your business based on today’s headlines.
If it [a downturn] gives you a chance to buy something that you like and you can buy it even cheaper, then it’s your good luck.”
“People would be better off if they said, ‘I bought a business today,’ not ‘[I bought] a stock today’ — because that gives you a different perspective on it.”
Warren Buffett
📊 Size 📊
small & mid caps = a major focus, occasionally both large caps and micro caps
hence, most stocks will likely be names you never heard much about or at all
N.B. retail investors have a BIG advantage NOT having a big capital to be invested = full freedom, no mandate, no restrictions, one can invest in anything — conversely, funds the bigger they become, the more limitations they have given the size via the smaller possible investment universe, liquidity, and that besides the big limitations via a mandate, governance, high costs, benchmarks etc
📊 Frequency 📊
between 1-6 per year, maybe a bit more than that, it depends: it is not easy to find great companies at decent valuations — as a reference, there are many funds with many employees who make 2-14 investment decisions times a year
only on YouTube/TikTok to be found ‘10 stocks to buy this month, or week … or today’ … sarcasm alert … anytime you hear that your spider senses should be up and running … it does not look good, not good at all!
goes without saying, even after finding the companies it is highly time intensive to ‘put pen to paper’, aka produce the actual reports
I have a clear and big Wishlist also besides my own investments, though price paid maters a lot for future returns, hence a lot is also waiting for better prices: be it via a general market selloff, or a temporary dislocation between the price and the potential and fundamentals of the business
Volatility = Opportunity, and not Risk: recall Buffet’s 2024 annual letter to Berkshire Hathaway shareholders where he describes: while great businesses are very seldom to be bought in their entirety (not a problem for us), small fractions of these gems can be purchased very occasionally at bargain prices!
👉 Research style and delivery:
simplifying the complex via sleek charts and plain English
broad yet deep coverage by saying 10,000 words via charts and clear sentences — e.g. when I describe the business model I will really explain how is the company delivering value to customers and making money, instead of using a bunch of Mambo-Jambo marketing buzzwords and complicated smart sounding concepts
balancing simplicity with technicality and length of a research piece = is very tricky to do, but that is my big approach to deliver value to a broad audience
📊 Independence 📊
I cannot stress how important, valuable and also how rare truly independent thinking is, especially nowadays — hence I made an entire dedicated post on the topic:
in short, full freedom here, no conflict of interest, no mandate, no benchmark, no self-censorship, no boss tapping around the shoulder to change this or that
without independent free thinking, there can’t be any independent conclusion
my related tweet with +200,000 views:
and the one and only Nassim Taleb on the subject & retweeting my tweet:
Note also one of my favorite life rules shared by Taleb during his Commencement Address at the American University in Beirut on June 3, 2016:
‘If something is nonsense, you say it and say it loud. You will be harmed a little but will be antifragile — in the long run people who need to trust you will trust you.’
Nassim Nicholas Taleb
👍 Takeaways 👍
Overall goal
👉 find great companies at reasonable valuations for the medium-long run
👉 ideally with a view of never planning or need to be sold, hence durable businesses
Skin In The Game (STIG)
👉 all companies covered in this section will be ones that I am also personally invested, hence personal Skin In The Game (STIG)!
👉 the only exceptions will be when the valuation is too high, hence patience and waiting for better times to buy — naturally, the relevant disclosures will be made
Mindset
👉 business owner as a long-term shareholder
👉 thinking as a long-term investor bring both results and makes things easier, and I know that very well from both buying shares, but also as I founded and run a start-up back in 2010 — they are both the same world, but also a different world
👉 a stock is first of all not about the excel and ratios, it is about the business per se
👉 recall Buffett reflecting the great synergies between the two, and overall mindset:
“I am a better investor because I am a businessman, and a better businessman because I am an investor.”
"You don't buy or sell your business based on today's headlines. If it [a downturn] gives you a chance to buy something that you like and you can buy it even cheaper, then it's your good luck."
"People would be better off if they said, 'I bought a business today,' not '[I bought] a stock today' — because that gives you a different perspective on it."
Warren Buffett
Have a great next week! And never forget, keep compounding: family, friends, community, capital, knowledge, research and mindset!
With respect,
Mav 👋 🤝
“Compound interest is both the ultimate and biggest natural hedge!”
Maverick Equity Research
Hi Maverick, you like Swiss companies, what do you think of Nestle at current prices?
Kind regards
Adeel