How to build a stock portfolio from scratch in 2022 - Episode #1

TL;DR

The Brians are teaming up with Commonstock to invest $250 weekly in high-growth companies, sharing their process and results.

Transcript

Brian and I have some exciting news to share  we are teaming up with commonstock to put   real money behind our favorite stocks and we're  gonna show you the step-by-step process of   how we would build a brand new stock portfolio  from scratch starting in 2022. each week we're   going to be putting $250 of our own money  into our favorite stock id... Read More

Key Insights

• ✋ Axon Enterprise is the first stock in the Brians' new portfolio, focusing on high-quality, high-growth companies.
• 😫 The investor policy statement guides the Brians in setting clear objectives and managing expectations for their portfolio.
• 🎗️ Valuation is de-emphasized, with a long-term investment horizon in mind, supported by research on stock market returns.
• 🤣 The Brians aim to beat the market over rolling five-year periods while expecting that not all stocks will outperform, following JPMorgan's research findings.
• 👮 Axon benefits from network effects and switching costs, supported by its software solutions for police forces.
• 🥶 Financially, Axon has high gross margins, strong recurring revenue, and positive free cash flows, but notable stock-based compensation.
• 🤩 Axon shows promise in cloud-based revenue, future contracted revenue, and growth in non-core clients as key performance indicators for investors.

Questions & Answers

Q: What is an investor policy statement, and why do the Brians believe it is crucial?

An investor policy statement outlines guidelines for investing, like objectives and time horizons. The Brians see it as essential for achieving investing goals effectively.

Q: Why do the Brians aim to outperform the S&P 500 with their new portfolio?

By outperforming the S&P 500, the Brians aim to be compensated for the extra work involved in picking stocks, potentially yielding higher returns.

Q: How do the Brians plan to manage volatility in their portfolio?

The Brians anticipate significant drawdowns but remain unfazed due to their long-term time horizon, expecting portfolio highs only 5-10% of the time.

Summary & Key Takeaways

• The Brians are building a new stock portfolio by investing $250 weekly in high-growth companies.

• Their strategy includes a focus on long-term growth, valuation de-emphasis, and expectations management.

• The first stock they're investing in is Axon Enterprise, a high-growth company with a solid track record.