Investment Journals

by Daryl B Starr

I write down my thesis before investment decisions. The act of writing clarifies my thinking. The notes also record my “why.” As reality unfolds I can reflect upon my logic and assumptions. Not everything is a winner, but at least I can discern if it was a judgement error, false assumptions or simply bad luck.

Trello and Evernote are software tools that help me organize the notes. They are somewhat akin to an index card in a giant digital shoebox. Some ideas focus on a particular company. Other ideas merge companies, industries or product lines. Hyperlinks are like paperclips between the cards. The best ideas tend to get more attention — measured by files uploaded and comment count. However, some of the most active ideas are also mothballed. Sometimes we know enough to restrain ourselves. That doesn’t mean we never return to the idea. Frankly, the compounded knowledge is growing.

Multiple people have access to the ideas at Little Engine Ventures. I’m not looking for a committee vote. Instead, I’ve encouraged each to add more data and differing viewpoints. In this way, we all learn faster and stay in sync. I still like to research ideas myself. It’s like investigative journalism. I learn things. I follow hunches, or abandon ideas midstream. Other times, we just needs to assign some boring tasks to staff members. Mikel also began using for some of this work. Again, our big thesis for LEV is to drive down friction costs to perform a transaction in the smallest transferrable company class possible. We obsess about it at the management company.

I see similar journaling developing within companies we have acquired. If a business manager is going to allocate his overhead differently, is it not wise to write down the theory first? Share it with core team members? Investigate the possible outcomes? Modify course if conditions change? Review his logic?

I appreciate journaling. It clarifies my thinking. The real magic is in prioritization, but that’s another post.