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Identifying Competitive Advantages with Matthew Cochrane

 

FEATURING: THE MOTLEY FOOL’S MATTHEW COCHRANE

 

Q: What’s your investment philosophy? And how does writing for the “fintwit” community influence your strategy?

A: I look for companies with strong economic moats, or competitive advantages, preferably in growing industries or with large market opportunities. While this requires a lot of qualitative work, including wading through conference call transcripts and 10-K filings, I don’t think there is any more important factor than understanding a company’s moat.

I’m a firm believer in iron sharpening iron. Fintwit is an amazing community where some great investors have been incredibly generous with their time in educating and sharing. I’ve used fintwit to find ideas, as a shortcut to finding answers to questions that had me stumped, and for valuable feedback on my personal portfolio (which I regularly share).

Q: Your Twitter thread (above) analyzed major US banks. What about your analysis did you find particularly interesting? What should investors take away?

A: Sometimes there are no mind-blowing takeaways, just helpful reminders. And, by that, I mean they are helpful reminders to me too! Some investors often focus too much on valuation, forgetting to look at the quality of the business. Others look at quality and growth, without paying too much mind to valuation. 

For instance, JPMorgan Chase (JPM) and U.S. Bancorp (USB) were the most expensive major US banks, but they also sport the highest return on equity. Hopefully, this thread reminded investors to consider both sides of the coin, quality and value, before investing.

Q: How long have you been using YCharts and how has it been most impactful?

A: I’ve been using YCharts in one form or another for three years, since I started writing at the Motley Fool. For investors, it’s a tool that can save a lot of research time, as it makes it extremely easy to compare different metrics very quickly for a given group of stocks. 

Q: Is there a secret tip or favorite feature that you’d like to share with other YCharts users or someone considering trying out the platform?

A: Just how easy it is to compare stocks on your preferred metrics. Simply plug in your favorite stocks and bring in different metrics, growth rates, and valuation ratios on the menu. Literally, within minutes, you can easily run 10-12 charts, which makes my research process much more efficient. 

Q: You use Twitter to share details of your analysis process. How would you say our platform enables you to share smarter insights?

A: A picture is worth a thousand words! Whether on Twitter or another platform, consumers want relevant information packaged in a concise explanation. It’s hard to do that without using visual aids and graphics. YCharts makes this incredibly easy to do with its tables and charts.

Matthew Cochrane

The Motley Fool
Contributor
@FoolMCochrane

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