Investing basics2001, rev. 2021
Expectations Investing
Michael J. Mauboussin and Alfred Rappaport
Teaches how to read the expectations already embedded in a stock price and judge what a company must deliver for the investment to work.
Checklist
Do I have a rule to understand the business before the ticker?
Do I have a rule to separate market price from economic value?
Do I have a rule to test the thesis against evidence?
Do I have a rule to build a process before committing capital?
Write down what would invalidate the thesis.
Set a review date before acting.