The Investor Diary Entry #18: February 28, 2023
Yesterday I started studying FuelCell Energy, after I thought I have read enough about the industry and how analysts look at the top hydrogen fuel cell companies and the Hydrogen Fuel Cell Energy industry in general.
Today I continued reading the 10K report for FuelCell Energy to better understand the company. This reading made feel that I still don’t know anything about the industry.
While reading about what FuelCell is saying through their operations, I wanted to know what the other companies are saying and compare those reports.
I feel that the Hydrogen Fuel Cell industry is vast and not all companies are playing the same field.
Changing My Plan
I am going to continue reading the FuelCell Energy report, but will not continue this reading as part of my FuelCell Stock Analysis, but rather as part of my understanding of the industry.
I will continue reading FuelCell 10K and then move on to read another company’s 10K report. Such a method will give me a better understanding of the industry structure, and in what field each company is playing.
Many renowned investors advise new investors not to invest in companies that they do not understand. Their basic advice is that an investor should understand the company’s business to think about investing in it. The advice continues to warn not to invest in companies that you don’t understand where their money is coming from.
Studying A Promising Industry
I thought I understood the advice of those veteran investors. The advice seemed simple and logical. Now after I got my interest in such an industry as the Hydrogen Fuel Cell Industry, the advice is not as clear to me anymore.
If one needs to invest only in companies that one understands, then what happens to investing in new industries. Industries that are futuristic. Should I leave those industries to the experts in the field and when such an industry becomes common knowledge then I would invest in it.
Or, if I am interested in a new industry, then I should make it my duty to understand this industry if I am going to invest in it?
I think it is the second one for sure. At least this is my take on the question. I agree that one should invest in the company and the ticker. Therefore, if I am interested in a new industry, I should first understand this new industry and its structure, then I should study each company and understand their position in the industry structure and how they make their money.
A Very Long Process
This is for sure a very long process, and it might take weeks from me to understand an industry and then make such a deep understanding of each company.
I don’t know if in this way investing would become boring for me. The answer to myself would be; investing in essence should be boring. Boring brings consistency and positive results. If one is looking for excitement in the investment world then one should expect losses through such excitement.
Another question would be, while I am taking my time studying an industry, would the industry kick forward and start rising while I am still studying?
For sure, I am not an early bird in studying this industry. I am sure that since I heard about it, then I am very late already. On the other hand, this industry might not go anywhere, or the companies within this industry that I am going to invest in are not the ones that are going to fly.
Without considerable knowledge and doing a proper home work, all what I will be doing is pure speculation. Well, speculation is a nice word, I think I would be betting on a roulette table without enough knowledge.
Even after all this research and study, since one is studying a new industry, one can only guess which direction this industry might take, but at least I would know that I did my homework and did not make my decision on guessing or hearsay.
Final Decision
After the above brain storming session, my decision would be to alter my plan from continuing to read reports for stock analysis purposes, to continue reading reports for industry analysis purposes.
If this process will make me go back to study those reports with a different eye when the time comes for stock analysis, then so be it.
I might take a different approach by then. I might opt to read the quarterly report instead, when conducting company stock analysis.
Conclusion
Studying the annual and quarterly reports was the last part of my FuelCell stock analysis; therefore, I already conducted the financial valuation and saw what the possible value stock price would be for me. It was much lower than the current price.
FuelCell current stock price falls within my recent change in my investing strategy that suits my investing capital which is choosing the best small cap companies, but I also like to buy a small cap at a value price.
Therefore, giving myself the time to study the industry well will serve me well, especially that I don’t feel that I am wasting any opportunities; in addition to the fact that I fall within the group that sees a value bubble that is supposed to either burst or at least deflate gradually.
The Investor
Tuesday 28 February 2023
About The Author
I started to look into individual stocks in January 2022. I created this diary initially for myself to track my investing progress, and second as a place that I can share my ideas publicly hoping that others will share their ideas and learn from each other, and lastly as an online business where some links that I share are affiliate links, and if anybody bought anything by clicking those links I will get a commission based on that successful sale, which of course will not affect the price that you are buying the product or service at.
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