It is important to identify important turning points in company’s story
In my recently published book Story Investing I discuss how to be creative in the investment research process and come up with great investment ideas. One of the highlights of the approach is the proposal to identify important turning points. Just as in any good story or movie there are important turning points, there are such inflection points in company’s history. After such turning point is identified, one can develop both a historical perspective as well as future narrative around this event. A major turning point can be a spin-off, sale of a division, a merger, etc. One should not be carried away into fantasy with this storytelling: the story should be combined with analytical thinking and should be supported by fundamental valuation.