A Bird's Eye View of Dixon Technologies Does Not Look Good

livemint.com:

looking at its fundamentals or the business model? A lot of investors would consider this as ridiculous. Some may even call it blasphemy. After all, you need to have a thorough understanding of the business model and the financials before making a sound judgement on a stock.

This is easier said than done though. For example, if we consider there are 1,000 stocks worth investing in India and spend no more than two days understanding each stock, the exercise of knowing the entire universe of stocks will still take 2,000 days. That's almost six years.

Besides, even if you complete this mammoth task, the fundamentals of many companies could have structurally changed by then. You would need to re-analyse those companies. Well, the only way out of this vicious circle is having a framework, which restricts your universe of stocks to a manageable few.

In fact, this brings to mind the famous Steve Jobs quote: “People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are.

You have to pick carefully. I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying no to 1,000 things." Just as innovation is saying no to 1,000 things, successful investing is also saying no to 1,000s of stocks and investing only in a select few.

However, you can't be analysing each stock and then rejecting most of them. This, as we just discussed, is practically impossible. So, how to decide whether you need to dig deeper or give the stock a pass, in say like 5 minutes? What should a 5-minute test of the company look like? I don't know about others but this is what I do.