I receive questions in my email and once in a while I like to sample out few interesting ones. In last one month or so, I received two very interesting questions on which I presenting my thoughts below.

Why do you make your analysis very length and elaborate, although I like the completeness? Is it really required? Looking at EPS, P/E ratio and similar four or five parameters should be good enough to make a judgment decision.

Completeness cannot be obtained without being elaborate. Am I right? I do not now weather a length of analysis is required or not. In my view, length is not a barometer in my analysis process. I am looking for few things based on my objective, and I pursue it to understand it better. Many times I stop short knowing it is not going to be worthwhile to continue. I am looking for generating income using dividends and capital appreciation.

1. I focus on trying to understand sustainability of cash flow, dividends, and potential capital appreciation over a period of time.  Therefore, I look at dividend history and attempt to project future returns in few different ways.
2. Assuming I believe it is a potential opportunity, and then I focus on what would be good price to buy the stocks? Here also, I look a few different ways to come with my fair value.

These are the only two steps that I am doing in my analysis. If trying to understand these two makes the analysis length, so be it. I am not too worried of being elaborate or time consuming or length.

I had a practice session for MBA entrance exam group discussion and the topic was “Quality of Free Content”. Majority of the participants were of the opinion that free content, specifically stock and finance related, is generally not good. I mean, the perception is if there any value to it, there will always be a price tag. By value I mean even a faint hint that it can be sold. Another perception was lot of content is hypothetical or academic with lack of practical applications. All of them present concepts and ideas, and no examples of how can we benefit from it. What is your opinion?

Very unusual question for this blog. Isn’t it? I would tend to agree with you on the general perception that free content is of bad quality. However, I do believe that in the context of blogs it is evolving. When one pays for a product or service or content, it is not necessary it should/would be of excellent quality. We know that with paid content things can be bad too. Right? Similarly, with free content, quality can be good or bad. It depends upon consumer or user to determine what is good quality of bad quality. In blogosphere, there is excellent quality content from many bloggers and all of them free. One may feel the percentage is skewed towards bad quality. But then it is likely that users do not visit them often, because they do not sensationalize the issues and are grounded on reality. For example, one big jump in stock market, and every broker/trader goes bonkers with optimism like there is not end. Most of users (if not all) throng to such blogs. On the other hand, good quality bloggers will continue to remain grounded.

I also agree with the thought that conceptual scenarios and ideas occupy more space in the content. There is lack of experience sharing. Here again, blogs are evolving. Many bloggers do present their experience. They discuss their thought process on how they apply it to their situation. It’s all about perspective and expectation. To summarize, the best way to address this is to figure out what you like and what is beneficial to your situation. And then follow it without getting distracted. That’s what I do.

What do you folks think?

reader questions