Having finance background is NOT advantage in investing

There's a misconception that finance people have an advantage in investing.

I'll argue it's the opposite.

TLDR:

- Knowing how to read financial statements is not the same as understanding the business. This mistake is made by many as they extrapolate past performance into the future.

- A great way to have an edge is to speak with professionals who use the product/service often, as well as professionals who use the competitor's products. Interested in Salesforce or HubSpot? Find people who are using Salesforce at a large company, understand what they like/dislike, but also what their opinion is of HubSpot. Do the same for someone who’s a long-time user of HubSpot. Do that with 10 professionals, and you’ll know more about Salesforce and HubSpot than 99% of investors in the two companies. You’ll understand how these platforms developed over time, the competitive advantages/disadvantages, and what they expect next. Then, and only then, will a finance background be useful.

Full post: https://thefinancecorner.substack.com/p/the-closest-thing-to-insider-knowledge

Estimated reading time ~4 minutes