Introductory Guide to Analyzing Stocks: Subjective Analysis Fin’
This article is a continuation of “Introductory Guide to Analyzing Stocks”
Refer to Objective Analysis here
Refer to Part 1 of Subjective Analysis here
While I wrote these articles expecting to have subjective analysis all in one singular publication, the length of my examples adds to the article's read length and I believe segmenting the two would be best for digestability. In this final article of the series, I hope to help you learn how to assess the risks of investments and create your investment thesis, as well as other key considerations that may influence your investment decisions.
Risks
With any investment, it's important to assess the risks and take a look at the stock from the opposite perspective. It's so easy to fall victim to confirmation bias and become pigeonholed into 1 singular perspective about a stock. The best way to assess if the company you are analyzing is truly a worthwhile investment is to take on the perspective of someone who may be arguing for the opposite end of the rationale. Try to find bits and pieces that hurt your argument, and make sure you broaden your horizons to craft a nuanced argument. Some risks include potentially challenging upcoming macroeconomic challenges, profitability/growth issues, risky moves into R&D or M&A…