Picking Stocks Is Like Dating

本站添加: 2026-05-10

[00:00:00]Picking stocks is like dating. In this video, I will show you nine points that look alike. This is the same process.

[00:00:07]Picking stocks is the same process as dating and I will explain why. In case you are new to this YouTube channel, welcome. My name is Kristou Noure. I've been investing in the stock market for almost a decade with a performance of 25% per year. So, let me not waste more time. Let me zoom in a little bit so you see better and let's start for the first point.

[00:00:28]The first point why stock picking is exactly like dating is the initial attraction. First, when you see a stock or when you see a woman, you have the initial attraction. That's very important. I mean, we all look at companies, women at first glance and we have our first impression. So, imagine swiping through dates like on Tinder, uh Bumble, etc. But for stocks. This is exactly what we do in our process of stock idea generation. When you generate ideas for your stocks, for your portfolio, this is the same phenomenon that you do for dating. You cover a lot a lot of uh people in your environment, on your dating apps, on real life and you look for the most interesting ones.

[00:01:17]This is the same phenomenon for stocks.

[00:01:20]So, let me get this. Imagine you meet someone you like. Normally, you are attracted to this person. That's the same process for a business, for stock.

[00:01:31]Sometimes, stocks will hit you in the face and say, "Wow, this is unbelievable." And sometimes it's a quick pass. Sometimes, for example, on my end, I don't like unprofitable businesses. So, if I take a look at I don't know, 10 stocks, they are all unprofitable, the businesses are all unprofitable, it's a pass. It's a pass.

[00:01:51]It's a pass. And sometimes, I find some great opportunity, exceptional businesses. Now, I'm hit 2x4. That is the same thing, initial attraction, that I get for women. You can say the same thing. So, I mean, maybe there is a correlation. If you are good with dating, you are good with stock picking. Maybe this is the case.

[00:02:12]This is a theory that has to be studied, but yeah, you have the same process in your brain. Just as you are attracted to someone initially, you must be interested in the fundamentals of a business. So, you can look at the financials, the growth, the potential.

[00:02:28]One website, some actionable tips for you. One website to take a glimpse at the stock, the company is GuruFocus.

[00:02:36]I have made more videos on this YouTube channel. Don't hesitate to to watch them be after this.

[00:02:42]GuruFocus is a free website where you have some charts. You put your ticker symbol, you put the name of your company and you have the growth with the small charts. Revenue, earnings, EBITDA, whatever you like whatever you like.

[00:02:56]Buybacks, dilutions, debt, cash, growth, the return on invested capital, the return on equity, is the stock cheap, expensive? You have all the key metrics and you can understand them in 30 seconds, 40 seconds. That's great. So, take a quick look, a glimpse at the company. See if you like it. You see if you like the numbers. If you don't like the numbers, it's a pass. Check another business.

[00:03:18]Okay. And yeah, this is exactly why first attraction matters. You want to be intrigued. You want to be curious about these company the same way you can be curious about a woman. So, initial attraction matters. So, Oh, yeah. That's the first quiz for you.

[00:03:34]Looks can be deceiving. I don't teach you anything, guys. Looks can be deceiving for people and this is the same phenomenon for stocks. Sometimes, a flashy tech startup might be appealing to you. But this might not be a good investment. So, I have a question for you. Have you ever made an investment based on initial attraction?

[00:03:56]You have the comment section below.

[00:03:58]Comment whatever your story is and what was the outcome. This is a double-edged sword. Sometimes, you get hit 2x4 and this is a great business and you make a lot of money. Sometimes, you are getting interested, but this was a full trap.

[00:04:10]This was a complete trap and you made you lost a lot of money. So, this can totally totally happen. Okay.

[00:04:17]Let's continue. After the first impression, what is the step for the dating process? The second step is getting to know each other. Yeah. You are talking about dating. This is a video about dating, so let's get to know each other. Just like dating uh just like dating involves going on dates and having conversations, investing involves diving into the company's financials, understanding their business model, and evaluating their market position. Once you are interested in a stock, it's time to do the work. It's time to ask some questions. Okay, what is the growth rate? What is the compound annual growth rate? What are the margins for this business? Okay, e are the margins growing over time, over the past 10 years or decreasing? Is the business getting more efficient over time or less efficient over time? What is the valuation? What is the market position?

[00:05:06]What is the market share of the company?

[00:05:08]Is the market share of the company growing or decreasing? Are they the leader or the challenger? That's a that's some good questions to ask when you discover a new business. You want to see the competitive position of a business. Let me scroll down. That's time for you to do your homework basically and I've made plenty of videos on this YouTube channel talking about how to analyze numbers, numbers, how to analyze the balance sheet, the income statement, the cash flow statement. You want to know your numbers, analyze them to see if okay, you want to go deeper or you just take a pass. Maybe you will fall in love with the company and maybe at this step two, after the initial attraction, it's a pass. You say, "Oh, it's too complex for me." I mean, you have this. Understand the business model. Sometimes, you will have you will have some crazy growth, amazing growth, perfect a lot of good margins, high margins. But after all, if you go deeper, you don't like the business model or it's not ethical for you or you just don't understand what they are doing exactly. A good process, another actionable tips for you guys, a to see if you understand the business is to ask this question. Can you pitch the business model to a child, to a 10 year 10 year old child under 2 minutes? If you can pitch the investment thesis, the business model in 2 minutes to a child, that's fine. You can have a simple thesis. That's good. That means you can understand the business model. If that's too complex, I mean, Nvidia, ASML, all the chip makers, I would not be comfortable pitching this to a 10 year old child under 2 minutes. I mean, ASML, you have some lithography, you have some difficult words to understand.

[00:06:57]I'm personally not comfortable pitching this. So, this is too complex for me.

[00:07:01]That's a good process. And if you tell me, "Let's pitch I don't know, Monster Beverage, the energy drink." Quite easy.

[00:07:07]Quite easy. In 2 minutes, that's quite easy. Okay.

[00:07:10]Continue. So, this is for for you the time to do your homework. Company's revenue, profit margins, the market share. See the key aspect of the investment and see if it matches your investment style. For example, maybe you like to invest in uh profitable companies that grow and become more efficient over time. This is the way I invest. And sometimes, you will get disappointed. If you look at the revenue, it might be decreasing. So, yeah, see if it checks your if it matches your investment style. That's quite important. You don't want to you want to stick to your lane basically. If you have an investment style, be disciplined. You have your criteria, all right, guys. You have your investment criteria and you select the best opportunities. My preference for dates is to go to a cafe and talk for hours.

[00:07:54]And if I see if I see if I like the conversation, the interest and you see if you have I have a match with the other person. So, this is the same way for stocks. I I mean, instead of going to a cafe, I check their reports. I check the business model, see if I like if I'm I'm getting more interested and you will see at this point if you want to go deeper with this company or not. The same way as you go to dates, you go to a cafe for 1 hour, 2 hours and you see if you want to see the other person again. That's that's the same process. And if you don't like what you see, you say you send a message, you call the person, you say, "Yo, that was cool, but I don't think I will move forward." That's fine.

[00:08:38]Prefer to be honest like this rather than ghosting the other person. But I mean, you can't say send a message to companies. You can ghost them, but yeah, don't hesitate to be a harsh grader at this point. It was Monish Pabrai who said that when he Monish Pabrai, one of the protege of the late Charlie Munger, who said that he moved to Texas after COVID and he made new friends in Texas in the US and he was a very harsh grader for your friends. So, he accepted the invitation to drink some tea to somebody else's house, but he was a very harsh grader and at the end of the friendly date, I mean, how to get dates basically, appointments. I don't know how to say it for for friendly relationships.

[00:09:21]He asked himself, "Okay, I spent 2 hours with somebody else. Do I want to see him again? Do I want to see her again?

[00:09:30]Did I grow out of this conversation conversation? If I didn't like it, I will never see him again."

[00:09:37]So, being a harsh grader is very hard.

[00:09:40]It's some truth telling. I mean, it's difficult to be a harsh grader, to be drastically honest, but that's the best way to not fall into traps either for life or for stocks. If you give a second look to investment, maybe we give a second look to a bad So, I would advise to stay to stay with your circle of competence and to follow your gut, basically. Like Monish Pabrai, ask yourself, after looking at the stock for 1 hour, 2 hours, ask yourself, do I want to go deeper, like deep deeper, or I'm too bored I will find another investment idea. Don't hesitate to be a harsh grader because you have over 50,000 stocks in the stock market. You have the choice. I mean, you have the choice. You can go in the US, you can in Canada, you can go in Europe, you can go Italy, Germany, France, Sweden. You can have a lot of countries, a lot of stocks, a lot of rocks to turn.

[00:10:33]Don't hesitate to be a harsh grader. And if you still like the investment thesis, if you still like the company, you can continue.

[00:10:40]Finding the right fit. In both dating and investing, it's important to find the right fit. In investing, you need to see if a stock fits your investment strategy and aligns with your risk tolerance and financial goals. Very very important. So, you have to assess if goals align. If you want to invest in growth companies and you are you are young and you want to invest in growth companies, or you are at a certain age and you want to be safe.

[00:11:06]That's deep. I mean, if I were 70 years old, I would invest in Berkshire Hathaway and I would not try to guess who is the next what is the next Amazon, for example. It depends on your risk tolerance, investment style. If you are 40 years old, you are young, you have time ahead of you, you have some decades. If you are 40 years old, 50 years old, even 60 years old, you have some decades. So, you can be more aggressive your strategy. So, you can assess if this is the right person for you or the right stock for you. Okay.

[00:11:37]Check if the stock fits your strategy.

[00:11:40]It's the same thing for dating. If they think the same way, you have similar interests, etc. For example, I'm French and I have some specific tastes for wine and cheese, for example. That could be something. Or I play the drums.

[00:11:55]I've been playing the drums for 15 years. I want to see if the other person likes music, rock band, funk band. That is I'm part of a rock band. So, yeah, that could be some similar interests. I don't know. Same thing for stocks. See if For example, I could be perfectly comfortable buying a company about drums kit. Okay, they sell drums or drum drum drum kits to people. I know the business model. It aligns with my value. I understand how they it works. For semiconductors, uh not not my kind of investments. So, see if you like see what you like in life and if it aligns with your investment style.

[00:12:32]Match the risk tolerance. Risk risky bets, not risky bets, risk on, risk off and check your financial goals. For example, if you if we encounter a great financial crisis 2.0, if we have in the next few years a great financial crisis like 2008, can you survive? A lot of companies have debt.

[00:12:54]A lot of companies don't have debt.

[00:12:57]I mean, you can't go bankrupt if you don't have any debt. The only way to go bankrupt is a dying business with a lot of debt. So, if you want to survive, avoid businesses with debt. This is quite easy.

[00:13:08]And if you want to go risk on, uh go full leverage, full debt to with a lot of growth. It depends.

[00:13:16]Somebody can have a large risk tolerance, a big risk tolerance, and somebody else will find another another kind of investment.

[00:13:26]That's why you have menu in restaurants.

[00:13:28]Everybody has their own taste. Example, you have a conservative investor versus a high risk startup. Yeah, different kind of investments, different kind, and different people. That's normal. Okay, fourth step. If you still like the business model, if you still like the investment thesis, if you still like your date, you learn about the date and you want to go deeper. Okay.

[00:13:51]Check the red flags.

[00:13:53]Check the red flags. I don't see any YouTube videos on this, so this is exclusive, I guess.

[00:13:59]Check the red flags. In dating, you look out for red flags in a partner, in a partner's behavior or past relationships.

[00:14:07]Similarly, you need to look for red flags in a company's history, like frequent changes in leadership or legal issues. If they were attacked by a short seller, uh if a company did accounting fraud, that is a red flag. If the company is changing their CEO every 2 years because the other guy messed up, that's a red flag. If they had the guidance of for the past 5 years, the the 5-year guidance and they completely failed, that's a red flag. If the management lies in public, that's a red flag. You want management to be competent and honest. If the management is lying with a bad behavior, is getting emotional on earnings calls, that's happens. I've seen it. People will get fed up during the earnings calls. That's a red flag. You want the CEO of a company to be rational, action-driven, number-driven with a clear vision for the company, doing the best for the shareholders' interests.

[00:15:07]You don't want a child to be the CEO of a company, basically. So, yeah, check for the red flags.

[00:15:13]There are some things that are no-nos that are a no-no for you. Yeah, depending on your style. By the way, if you're looking for a complete framework to analyze stocks and build a strong portfolio, I have a coaching program.

[00:15:25]More on that at the end of the video.

[00:15:27]What is good about public markets, public stocks, is that all the information is public. So, basically, you can check the past of somebody for the past 20 years, 40 years. I have sometimes checked the track record, the foundation of the company, how it was working, did they have to fire people?

[00:15:48]And as you see some books over there, you have other books here.

[00:15:52]Sometimes you have books for the history of the company and you will have 300 pages about the story of the company, how the company was born and evolved, and did they have to fire somebody, some bad behaviors in the past. You want to get inside the head of the management, basically.

[00:16:10]So, so that can be really helpful to read some books about the company before you go deeper. And similarly to red flags, you want to check the past relationships. The same way you do with dating. I mean, look at the company's past relationships. Has the company had issues like scandals or poor management decisions? This is similar to considering a person's past relationships in dating. For example, a management of a company can have can has can do I mean, maybe oh, sorry, I'm bad I have a bad English. The management of a company, maybe in the past they have done some stupid stupid acquisitions and they destroyed a lot of value. At the time in 2018, for example, they may have said, "Oh, yeah, this will create a lot of synergies and we will sorry, shareholders, but we will dilute you and use some debt, but we will create some value." You know what? After 5 years, they didn't create any value.

[00:17:06]They It was just dilution for a shareholders and a lot of debt. And what is even worse is that because of the acquisition acquisition, they took huge bonus because they were paid because in KPIs with the revenue. That can totally happen. I've seen plenty of companies have bad incentives that were not aligned with the shareholders. And you can check this. I mean, this is completely public.

[00:17:31]The third actionable tip for you, uh if you want to check the incentives of management, how is management paid for the bonus, one-off bonus at the end of the year, you can check the document called the annual report or the proxy statement, proxy report. And on these documents, you have the how compensation how the management is compensated. You have the CEO compensation. You have all the numbers. This is completely free and completely public. So, you have the fixed salary and the bonus salary. And for the bonus part, you can check what are the metrics that the bonus salary is based on. Sometimes the bonus is based on the revenue. So, as the management boosts revenue, they get paid more.

[00:18:10]So, if you do an acquisition, you boost your revenue regardless of efficiency, regardless of that. If you do an acquisition, more revenue, more bonus.

[00:18:19]So, this is a very uh sneaky way of having a huge bonus and buying a huge house as a CEO.

[00:18:26]If you dismiss shareholders, and sometimes the bonuses are uh linked to efficiency, like margins, earnings per share. That is maybe better for the shareholders, return on invested capital. You can check the incentives.

[00:18:42]And sometimes the incentives are very simple, sometimes complex. For European companies, the incentives are sometimes, a lot of the time, based on ESG metrics, environment, scope two, three, four emissions, happy at work environment.

[00:18:57]This is not very often the case in the US, mostly in Europe, and most of the viewers of this YouTube channel are from the US. So, yeah, you can check the different earnings, different incentives. I would say focus on efficiency, return on invested capital, free cash flow per share. These are good KPIs, incentives for good incentives for shareholders. I mean, at the end of the day, the stock price of a company will follow its earnings per share, free cash flow per share. So, you want management to be rewarded if they boost earnings per share, free cash flow per share. I mean, why would they be uh rewarded if they boost revenue? It's too easy to to boost revenue. You take a lot of debt and with this debt, you do a lot of acquisitions, stupid acquisitions.

[00:19:43]You you lie to your shareholders saying that there will be synergies, but you completely lie publicly, but you have a huge bonus at the end of of year. So, look at the past relationships, that's quite important. Check the scandals, check the track record. The past relationships for a person, you can check if they have cheated on their past partners.

[00:20:04]Quite a red flag. Quite a red flag. You don't want to be in a relationship where the other guy before you was cheating on. So, yeah.

[00:20:12]And you can Let me go through this.

[00:20:15]Financial responsibility. Oh, that's a huge point.

[00:20:18]Past relationships, have they cheated on their partner? So, the goal of this fifth point is to do background checks.

[00:20:24]So, as I said previously, check the company's history, the management, the financial health. Did they have a lot of debt before? Have they paid off their debt? Why?

[00:20:34]Now, do they take on more debt to to do some stupid acquisitions? Similar to checking a partner's background. Yeah, you can check. So, another actionable tip for you, resources or tools you can use to research stocks. So, where do you find this information? I told you for the incentives, annual report, proxy report, proxy statement. Or for the track record of a company, you can check a website free website called roic.ai.

[00:21:00]You have beautiful charts, numbers for the past 20 years or more. You have the website that I mentioned before called GuruFocus. So, at a glimpse, you can check the financials, but you can go a little bit deeper. GuruFocus to have a snapshot of the history of the company.

[00:21:14]Yeah, that's a that's a very very good background check, and you want to go deeper, check the reports, etc. Financial responsibility.

[00:21:23]For dating, is the person good with money or burning cash?

[00:21:28]This is very very similar to capital allocation for companies. Capital allocation for a public company is asking the question, okay, you have generated earnings, what do you do at the end of the year with the cash? Do you do an acquisition? Do you pay dividends? Do you do buybacks? Do you hold cash in your balance sheet? Do you pay off your debt? What do you do with the cash? Are you smart with the use of cash? It's very similar to dating and relationships. So, you want to check the track record of a company. Did they do bad acquisitions? As I mentioned just before, sometimes companies do stupid stupid acquisitions, completely lie to shareholders, the incentives are very bad, and they burn cash doing some stupid stupid stuff. And you hate when it happens to you.

[00:22:12]Okay, that's very similar to dating.

[00:22:14]Okay, now six points about family and friends' opinion.

[00:22:19]Sometimes you consider the opinions of family and friends about your partner.

[00:22:23]In investing, consider expert opinions and analyst reviews about a stock. Take outside opinions so that you are not biased. Even Warren Buffett always had somebody to talk to. So, if the best investor in the world has to talk to someone before making a decision, you might want to talk to somebody. He talked to Charlie Munger or another friend. He had some other friends. If sometimes it was not Charlie Munger, somebody else. Somebody to uh bounce ideas off, as you say. So, you don't want to be biased, basically.

[00:22:57]You don't want to fall in love too easily. You want to reality check. You want to background check. You want other people's opinion.

[00:23:05]The goal is to find gray areas in the in your investment thesis. Something you may have missed. The same way you have How How How do you say it?

[00:23:16]Color-graded glasses when you fall in love, like rosy colors, and that that's how you make a lot of mistakes, basically. That's how you can miss a lot of information about your partner. You miss some red flags, past relationships.

[00:23:32]Ask some Ask some questions. I mean, if you are dating the woman of your dream, the woman of your life, the A lot of your friends will love her.

[00:23:43]Her.

[00:23:44]A lot of your family members will love her.

[00:23:47]And if they have a bad opinion about her, they will tell you why. Most of the time. I mean, they can lie, but uh it's better if they are honest. They will tell you why, so you can highlight some gray area of your relationship with the other person. Some things you may have missed because you are obviously biased because you are starting to fall in love. The same way you do with the company, by the way. Okay, next point.

[00:24:10]Commitment. Once you are falling in love, once you buy a stock, once you are sure about a stock, it's time for commitment. This is similar to becoming exclusive in a relationship. If you want to invest for the long term, you plan to hold for years or decades. So, be ready to commit for years. You don't want to change your mind after 2 weeks. Once you have done the due diligence, once you have asked for other people's opinion, once everything is clear, nothing is shady, you know a lot about the company, you went deep, incentives, track record, management, who is the CEO, what has been the past performance, what are the growth prospects, what are the margins.

[00:24:50]You have the valuation, everything is clear. You buy when the stock is cheap.

[00:24:54]After this, you commit for the long term.

[00:24:57]Warren Buffett is investing for the long term. The best investors in the world are investing for the long term. If you look at the Forbes 400, most of the time you have long-term investors, long-term owners of businesses. You don't have stock traders for 2 weeks. That's That's very rare to see this. So, you don't want to buy a stock and change your mind after 3 weeks, after 1 month. No, you want If you do your due diligence, everything, you want to buy and hold for many months, many years. And if the thesis has not changed, you continue.

[00:25:26]You hold and you hold.

[00:25:28]Now, eighth point, we are coming to the end of this video. Communication.

[00:25:32]Communication is key to understanding each other's needs and future plans in dating. In investing, regular updates and transparency from the company help you stay informed about its performance and future outlook. So, how do you stay informed? You can read quarterly reports, annual reports. You can listen to earnings calls, watch the investor presentation, and the interviews from the CEO. Everything is public.

[00:25:59]Every We are talking about public the financial financial market, which is a public way of investing in stocks.

[00:26:06]Everything All the information is public, so you have all the data.

[00:26:10]The only difference is how you analyze the data.

[00:26:15]So, you want to stay informed. Yes, you commit for years, but you have to monitor them, if they are still keeping up with their promises. If you continue and you read the quarterly reports, everything is fine, the thesis has not changed, investor presentation. And sometimes the story will change.

[00:26:35]Sometimes your partner will do something bad.

[00:26:39]That is life. We are living in a unfair world. Sometimes you analyze a company, you check the track record, and the CEO retires, there is a new guy outsider, and that they change completely the company. So, the thesis is collapsing. That is happening. So, that's why you monitor. That's why you need communication. And they are public companies, so they have to communicate with you as a shareholder. Be aware of this. Be monitoring. Be I mean, give them your trust, but stay updated. You don't want to be blind in this in this stage.

[00:27:13]When you become blind, you can fall into terrible traps for financial markets.

[00:27:18]Okay, last point.

[00:27:19]It's about patience.

[00:27:21]Patience is crucial in building a strong relationship. You know it. I mean I mean, yeah. Be patient with your investments, understanding that growth takes time.

[00:27:31]The same way you start to date somebody, a couple of months, a couple of years, you need to be patient. I know you. I know that in this YouTube channel, 99% of the viewers are male, are guys. So, you know how patience is important for women, and that's normal. That's part of the life. And the same way it is true for for stocks.

[00:27:51]For stocks, you need some commitment, patience, and if this is the good partner for your life, you will grow beautifully together.

[00:28:01]You just need a little bit of patience.

[00:28:03]And sometimes it might be hard.

[00:28:05]Sometimes for you will fall into recessions, bear markets, like in 2022.

[00:28:11]If this is a great partner, they will recover beautifully and get, you know, even better shape. This is exactly the same thing for dating.

[00:28:19]Sometimes you will have some I don't know, some conflicts, some bad months.

[00:28:23]Be patient. If you have done the due diligence, if this is the right partner for you, you will grow exponentially over the long term. If you like this content, I have an investing coaching program. In this program, you will learn a complete investing process. You will learn how to find good stock ideas, how to properly value stocks, when to buy, when to sell, so that you can build a strong portfolio with great companies.

[00:28:51]Additionally, in this coaching program, you will have access to my personalized guidance for long-term results. We will do weekly calls where we analyze stocks together, and you will have access to my private number, available 24/7 for full support. If you have any questions, I'm here to help. Click the first link in the description below to get more information. You will get a video, a short video that explains how everything works, completely for free. No need for your mail address. Just click the first link in the description, and I'll see you on the other side.