Ideas vs Conviction

My goal with Asymmetric Investing is to provide you with the best investment ideas and research possible, supported by the framework with which to think about those ideas. You can borrow my investment ideas (or not) as you see fit.

What I can’t do is tell you what stocks to buy or sell. That decision is yours. I’ll show you what I buy or sell based on my own conviction, but you can’t borrow my conviction. That needs to be developed on your own.

Generating Ideas

Coming up with investment ideas is hard and no one does it alone. In any given day, I visit hundreds of websites, read dozens of earnings releases and SEC filings, listen to conference calls, read research from people I trust, and bounce ideas off trusted colleagues. For the last 20 years, 40-60 hours of every week has been consumed by research or thinking about business and investing. My wife would tell you, for better or worse, it’s who I am.

Most people don’t have the time, energy, or the interest to do this amount of work covering stocks. But for those who want to take control of this investing journey for themselves, I hope to be a piece of your ideation and research process.

Each month I promise to provide premium members with 2-4 ideas with well thought out research based on my 28 years of experience. So far, six ideas have made their way into subscribers’ inboxes, which you can check out below.

• Spotify: The only company focused on “owning your ears”.

• Cruise (GM): Revolutionizing transportation.

• Peloton: Fitness anytime, anywhere, by anyone.

• Dropbox: The cloud that’s available on any device.

• Sony: #1/#2 in music, movies, TV, and gaming.

• Coinbase: The biggest name in blockchain technology.

You can feel free to love or hate any of those ideas as you see fit. I hope you respect my thesis on all of these stocks, but if you don’t hate at least one of these ideas off the bat, I’m not taking enough risk! After all, these are stocks that I think have asymmetric potential.

What I can’t provide in this newsletter is conviction that any of my ideas are right for YOU.

Building Conviction

The best I can do is provide research and SHOW YOU my conviction. That’s what the real money Asymmetric Investing Portfolio is for and premium members get my monthly buys BEFORE I execute any trade.

In its first two months, I have allocated money to six stocks and the allocations have been uneven, to say the least. My allocations show:

• I have the most conviction in GM stock

• I have the second most conviction in Spotify stock

• Peloton, Dropbox, and Sony are the next group of stocks I like

• Coinbase is a moonshot that I’m willing to put a very small percentage of my portfolio into.

I hope that the ideas you get here are helpful and I’m keeping the portfolio in part to keep score against the market. But you still need to develop conviction that these stocks are great for you.

Your Conviction

Everyone has their own investing process and I encourage you to think about and develop that process over time. Maybe starter positions work for you to get “skin in the game” before digging deeper. Maybe you invest in your best ideas weekly or monthly. Maybe you want to hear multiple viewpoints before buying or selling.

No matter what process works for you, I encourage you to document what your investment thesis is and track a company’s performance to those metrics. You’ll notice that at the end of each spotlight article, there’s a section called “What to Watch” that includes observable metrics you can track each quarter to determine if a company is doing well against my thesis, or not. Over time, these metrics tell me if a company is heading down the right path or the wrong path and these metrics will play a key role in my updates for premium subscribers.

I hope to play a small role in helping all of my subscribers find high quality investment ideas. And the Asymmetric Investment Portfolio will give you access to my conviction. The goal is to beat the market and the portfolio is outperforming the market by a nice margin so far.

Research continues tomorrow with a new stock for premium subscribers. I’ll be back later in the week with a post for free subscribers. To all of you, thank you for joining me on this journey!

Disclaimer: Travis Hoium owns shares of all stocks mentioned. Asymmetric Investing provides analysis and DOES NOT provide individual financial advice. All content is for informational purposes only. Asymmetric Investing is not a registered investment, legal, or tax advisor or a broker/dealer. Trading any asset involves risk and could result in significant capital losses. Please, do your own research before acquiring stocks.