I swiped left 432 times to find the one..

Finding the perfect investment can feel a lot like modern dating. You scroll through countless options, spotting some that catch your eye but fail to deliver that essential spark. In the last week, I found myself swiping left not just 10 or 20 times, but an impressive 432 times before uncovering a true gem. Here’s a peak into this unexpected adventure of financial matchmaking.

The Quest Begins

Picture this: a wall stacked with options, each promising you financial security. As an investor, my goal is to find more than just an attractive stock; I seek one with long term potential that I can hold for years. High-quality cash flow is crucial, as it ensures your investment earns money passively as well as sustainable growth. A reliable dividend can provide peace of mind especially in times of increased volatility like we are in today.

Did you know that since the 1920s dividends have contributed c32% of total return for the S&P 500?

In investments dividends are akin to gifts, consistent highly valuable gifts that compound over time.

The Criteria

To streamline my search, I set up clear criteria to hone in on my perfect match:

1. High-Quality Cash Flow: I sought an investment that actively generated cash returns. Cash flow is the heartbeat of any business. An additional attraction would be a business that can consistently throw up excess cash and pay out dividends, which compounds returns for shareholders.

   
   

2. Sustainable Growth: I wanted a company committed to long-term success. Look for steady annual growth rates; companies that can compound revenue or expand operating margins will result in sustainable earnings growth, and returns for you as a shareholder.

   
   

3. Intrinsic Value: As a fundamental focussed investor, identifying mis-pricing in a stock is key for buying into (or selling out of) ideas. Finding a new idea that I identify as undervalued is paramount to any buy decision.

   
   

With these criteria firmly in place, the swiping began.

The Swiping Commences

Reviewing my list of 432 candidates led to a whirlwind of left swipes:

No cash flow? Left!

Unsustainable growth? Left!

No valuation upside? Left!

As I pressed on, it became clear that many investments looked enticing on the surface but revealed themselves as hollow. Around the two hundred mark, I began losing focus, like a phone running low on battery. Yet, the thrill of the hunt and eagerness to discover the right one(s) kept me going.

The One That Stood Out

After what felt like an eternity, I finally discovered a company that made my heart race. It checked all my boxes:

• Cash flow that flows like a river in spring: This company had an impressive cash flow margin, showcasing its ability to consistently convert sales into actual earnings.

• A clear structural growth runway: Their annual growth founded on clear demand based sectoral tailwinds enabling a tangible positive momentum for the top and bottom line.

  
  

• Dividends for days: They pay out 1/3s of free cash and a reinvest the rest back into the business, further shoring up future earnings.

  
  

This was not merely a fleeting match; this investment symbolized a promising new partner in my portfolio!

The Verification Process

Before sliding into a long-term relationship (and committing my cash), I knew I needed to be diligent.. I conducted a thorough due diligence process, including:

• Analysing financial reports to understand revenue sources and cost management.

• Reviewing quarterly earnings for any warning signs.

• Assessing industry trends to see where the company stands.

• Building a financial model to stress test key drivers.

  
  

Each step built my confidence, hopefully ensuring I wouldn't face heartbreak when quarterly earnings were announced.

The Sweet Taste of Victory

Eventually, after numerous left swipes and careful research, I made my investment. The excitement felt similar to discovering a rare record in an old store!

The reality of course is that no match (or stock) is perfect and there could be many gremlins hidden in this closet.

However for now, my portfolio has a promising new asset, and internally, I feel comforted that there are still investment gems waiting to be discovered and adventures to be had ahead.

Reflecting on the Journey

In today's investment landscape, with so many choices, don’t settle for mediocrity!

Much like dating, it is necessary to swipe left repeatedly until you find that stock(s) which truly aligns with your financial goals.

Investing reaches beyond mere numbers; it’s about forming solid connections between your money and opportunities that resonate with you. Whether you face 432 candidates or just a handful, stick to your established criteria. The process may be challenging, but the reward of finding a robust investment makes the journey worth every swipe!

So, if you find yourself sifting through options, don’t hesitate to swipe left. The pursuit may be taxing, but when you discover "the one(s)," it will all be worthwhile!