The Worst Tech Stock People Trade Today | NASDAQ:GPRO

GoPro annual report 2021.

Let’s start with the four essential stock filters:

1. Understanding: we need to be able to understand the business. That does not mean we need to know how to navigate the menu on a GoPro camera, it means we understand the underlying models surrounding the economy around outdoor cameras.
2. Moat: if someone was given a billion dollars to build a competitor to our business, would they succeed?
3. Management: if the economics is favourable and the moat solid, we do not require overly talented management not to screw the business up — we merely need management with tons of integrity.
4. Price: no matter how wonderful the business is, we require a price that makes sense. We will, however, prefer an outstanding business at a fair price over a mediocre business at a dirt-cheap price.

Understanding

I will support my analysis using the following notions:

1. No-brainers: are there any self-evident remarks about the company and the business it is in?
2. Numerical fluency: do the numbers make sense for a profitable business?
3. Reverse thinking: after thinking about the investment problem in one direction, can we consider the same problem thinking backwards?