Systematic Investing: The Basic Thought Process

Posted on January 4, 2007

In the book "Innovation and
Entrepreneurship", famed management guru, Peter Drucker, provides
a two-line description of the entrepreneurial process that we think can
be modified somewhat to provide an excellent summary of the investment process we, and many others, advocate.

Drucker states:
"Systematic innovation therefore consists in the purposeful and organized search for changes, and in the systematic analysis of the opportunities such changes might offer for economic innovation."

And now our re-working of this description for the investment process:
"Systematic investing therefore consists in the purposeful and
organized search for changes, and in the systematic analysis of the
opportunities such changes might offer for corporate profitability, and security valuation."

Key questions to ask when utilizing a corporate change approach to investing include:

We hope to provide additional thoughts on change investing in later posts.

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