Introduction: "Diligence Report" Series
Introduction | 5 min read | An introduction to my "Diligence Report" case study series
Initially, I published these reports on my website, midstoryventures.com. By December 2022, I will have shut down the website and transferred all my work here.
I began my value investing journey in July 2019. I published these reports from July 2020 to November 2020. Consider these very early reflections of my thinking.
The Diligence Report series features five 5,000+ word write-ups on high-quality companies.
Here are the top questions that I have received regarding this case study series:
What are diligence reports? Diligence reports are an educational exploration of a business and its key considerations for ownership. They are meant to give enough facts to be insightful, but enough room to let you make own opinions. The goal of the diligence report is to identify the most important issues, suggest ways to think about those issues, then provide unbiased facts around those issues. The report ends with three questions to think about so the reader craft their own story about the company.
Why not an investment thesis? I have found that the most fruitful conversations happen when they are focused on the facts, rather than defending investment positions. I hope that this sparks the same type of dialogue between us.
Why small businesses? I started my business career in small business, so I have a natural affinity for them. The Internet is flooded with write-ups on well-known large caps, so if I can provide something that is unique, I hope it will bring you more value.
Why so many words? Thinking slow is important skill for decision-making. I find that it takes at least 5,000 words to peel back the most important assumptions. Geoff Gannon's Singular Diligence was also about 10,000 words.
How long did each one take? I spent one month studying each company. I take after my mentor who dedicated his entire focus studying one private company over the course of thirty to sixty days. I also admire Geoff Gannon, who proved that the format worked for his publication, Singular Diligence (now available for free on focusedcompounding.com).
Where can I read them now? You can find all these reports on the Case Studies section.
Jul 2020 | Collectors Universe: Framing the opportunity
Aug 2020 | OTC Markets Group: Framing the opportunity
Sept 2020 | Nathan’s Famous: Framing the opportunity
Oct 2020 | Wingstop: Framing the opportunity
Nov 2020 | Winmark: Framing the opportunity