My stock-picking theory, start to finish
1) Daily use.
Every pick starts with my own day, not a stock screener. I list the companies I rely on every single day, multiple times a day — the search engine I open without thinking, the apps I message on, the card I tap, the software I work in. If a company is already woven into my routine, it has passed the first test, because I understand it from living with it, not from reading about it.
2) Growing industry.
A great company in a shrinking industry is still a bad investment, so the second test is the industry itself. I want tech and finance — and the numbers back the direction: global chip sales hit $627.6 billion in 2024, up 19.1% in a single year, according to the Semiconductor Industry Association. Payments keep moving from cash to digital.
3) Hard to replace.
Then I ask the only question that matters about competition: how many real alternatives exist? Mastercard and Visa together run more than 80% of card payments. S&P and Moody's grade about 80% of US bonds. ASML is the only company that makes EUV machines. Google handles about 90% of searches. Zero or one alternative — that's a moat. And the barriers behind it are trust built over decades, networks nobody can rebuild, and regulation that locks the door behind the leaders.
4) Fundamentals.
Only after a company passes the first three tests do I open the numbers — because numbers without understanding are just noise. I check revenue growth, profit growth, margins, cash, and debt. Can I explain how it makes money? Is the cash real, or accounting fiction? Can it raise prices without losing customers? ASML keeps 57.5 cents of every euro in gross profit. Mastercard's earnings grew 21% while revenue grew 14%. S&P Global beat expectations and raised its forecast. The numbers are the proof, not the story — but without proof, there is no buy.
5) Buy point.
A good company at a bad price is still a bad buy, so I set my price in advance — a price I can defend with the fundamentals I just checked. Then I wait. I don't chase a stock that's running, I don't buy because everyone else is, and I don't let a green day rush me. When the price comes to me, I buy. S&P Global is the cleanest example: thesis first, price set, bought in October. Patience here isn't passive — it's the discipline that protects every other step.
6) Hold — but holding doesn't mean never selling.
After I buy, the job is to hold, but holding doesn't mean never selling. I sold Netflix after it ran far ahead of what I understood, and I trimmed ASML twice: once when it grew to nearly half my portfolio, and again to fund S&P Global, a better opportunity. I don't sell on noise, and I don't trim just to make a spreadsheet neat. I sell when the price runs past the numbers, when the position gets too big, or when the money has a better home.
