I have picked a few companies on my research list that are helping me make my 2026 to be meanigful. There are a few companies under my coverage in the first half of the year, which are Paylocity, Gartner, and Broadcom. There are no specific reasons related to how "longable" or "shortable" they are; the only reason that I want to pick these companies is that I want to understand their business models in order to gain my skills in researching public companies from different industries, which means I will need to understand their revenue build and to build financial models then process to the valuation part. For the second half of the year, to understand the banking industry or to pick one "bank" as my case study is also included in the plan. The value of the financial service companies is not generated from their Income Statement but from their Balance Sheet. It sounds boring, and indeed, it is...You don't generate alpha by buying bank stocks... As always, not a sector coverage analyst; I am a generalist and a trader, so there is no need to stick with one specific sector at this moment in time. But one must have a great willingness to learn in finance, so why not?
I am switching to FactSet and getting used to it. I have used Eikon for most of the time, and I used its Excel functions to build my screener for idea generation. But for some reason, I decided to switch to FactSet and start to refine my screener, which will be more nuanced on some metrics and company fundamentals figures, such as the quarterly trajectory of, for example, revenue or EPS growth rate. I generally think that seasonality is also important, and the sign of change from a company's fundamentals can be seen in its quarterly results. Imagine the stock price is traded lower for a while, but you see the improvement in the company's quarterly EPS, KPIs and overall, its fundamentals, that is probably a good opportunity to seize. Same princible can be applied to short idea generation.
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| FactSet in my ThinkPad laptop |
Lastly, I will focus on options trading and read books related to equity research. Options provide asymmetric returns to a trader; the RR is very important for a trader who wants to stay profitable consistently. The tool has a leverage nature, which provides high ROI and eventually improves my portfolio's Sharpe. The time decay can be hedged out by option strategies if you only trade simple naked call/put. Options as a replacement for equity can give stocks some times to converge with companies' fundamentals, I generally think this is the one of the reasons that attract me since your stop-loss levels sometimes will be hit by the flutuation of the stocks thorghtout the period, which is another pain for a cash equity trader - the view is right, the timing is wrong, and cry on the bed...I mean, I had such an experience before. Welp... for the books...I recommend "The Investment Checklist: The Art of In-Depth Research" by Michael Shearn. I came across this one from someone's shared reading list. I think this book is really providing me a checklist (in a smart way) to ask some critical questions while researching a company. I will write a book review in the future once I finish reading it this year later on.
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