Whats Your Investment Niche ?

What’s your investing setup? This is a term to describe your specific investment approach. Think of it as a template. In my case, I focus on stocks that have a bottoming chart formation and a low enterprise value to sales ratio. I want allot of operating leverage which enables me to invest in future 5 and 10 baggers. Having a set up allows me to be efficient with my time as I know exactly what I am looking for and how to analyze it when I find it.

if you’re looking to create wealth as a value investor in the markets you’re going to have to specialize in something.

If you want to buy a dollar of value at a large discount then spend your time studying tender offers and reading fairness opinion to understand what the going valuations are for cash flows across a spectrum of industries. Then search for stocks trading at low EBITDA to enterprise value multiples. You want to become an expert on valuations.

If you are a p/e guy then become an expert in recognizing the quality of earnings. Look for companies that have high returns on capital but are selling at a cheap price compared to those returns.

Your niche should be in an area that you are very interested in and fits your personality. This will allow you to put a lot of time in without having the work seem like a chore.

Another niche could be recognizing excellent CEOs. Study the great CEOs of the word so you can instantly recognize a great management team. This allows you to stay invested long term as the CEO grows the company and compounds your returns.

Once you have your niche you will be able to recognize stocks quickly and spend more of your time on analysis.