Investing Needs Economics

There is a belief that you need to know the entire economic big picture system before succeeding in investing.

People go into fancy thoughts about headwinds and tailwinds, and total addressable markets.

Some say there is some truth on how that can affect a company's fundamentals. Others go so far as to say that nothing could be further from the truth. Such economics is not sales, revenue, or bottom line. Now, or in the future.

If there is no economics big picture to understand, however, how can one get into the practice of investing, and do well in it?

Atul Gawande

To start off, if there are any big picture framework towards the right answer, the abovenamed author wrote a book on how to try to streamline the investing thinking process, to focus one's mind on a company's fundamentals. The book is called "The Checklist Manifesto".

The checklist, similar to the types used by pilots on aeroplanes and recreated by doctors in hospitals advised by the World Health Organisation, are used to guide pilots and doctors in their craft to ensure that they do everything right, or that they didn't miss out any important steps.

Atul Gawande writes of his experience in transposing the checklist from the pilots' to the doctors' context, and then also points out that checklists have been and can be used by investors in the context of investing.

There are, to repeat, no hard and fast rules in investing, but the proposed format and outline of Atul Gawande's checklists are in fact quite practical and helpful to help any investor streamline their investing thinking processes, to focus one's mind on a company's fundamentals.

Kinokuniya

A note of caution - the checklist as proposed by Atul Gawande tells you what the checklist ought to look like but does not tell you in proper detail what it's contents should be, particularly for the investing industry.

For a copy of this helpful book and its proposed approach to the investing checklist, click here.

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