Introducing RebelAlpha

I'd like to introduce you to RebelAlpha. I originally built it to solve my own problem, but by making it broadly available I hope to help other investors who are passionate about stock picking. (By stock picking, I mean buying quality businesses you believe will compound in value over time, not short-term trading.)

I'm fortunate enough to work at a global investment bank, which means I have access to Wall Street broker research. But I'm very aware that most retail investors who invest out of passion don't. What's more, I'm very often disappointed with the quality of Wall Street research. A good initiating coverage is generally the best way to get smart on a new company. Unfortunately though, most companies haven't had one published on them in years. And the broker research you're left with merely rehashes the latest earnings release or estimates the next one. You'll find very little insight on what really matters.

That's why I set out to build RebelAlpha: a tool that leverages AI to quickly learn everything worth knowing about a stock. Let me be very clear about what RebelAlpha is and what it is not:

RebelAlpha is a tool that helps you quickly understand how a business works, including its moat, business model, competitive landscape, growth potential, risks, financial strength and management quality. It helps you identify quality businesses and avoid value traps
RebelAlpha is NOT a tool that tells you which stocks to buy (business quality is only one half of the equation, valuation is the other). It is not a comprehensive due diligence or investment report. It is intended as a first screen to quickly identify if an idea is worth investigating further, or a last sense check to make sure you haven't missed anything. But always, always, always do your own extensive due diligence!

With those caveats out of the way, let me explain the vision behind the framework. Based on 10 years of experience in investing, I have narrowed down what I believe are the 8 most important dimensions when evaluating a stock. Let me briefly explain each:

Moats: The concept has become widely popularised in the last decade, and for good reason. Moats are what allow a company to earn profits above its cost of capital over time. While there are different analytical frameworks, I have personally found Hamilton Helmer's 7 Powers the most comprehensive
Business Model: Focuses on the quality of earnings a company generates, and in particular i) revenue quality, ii) profitability, iii) scalability and iv) capital intensity
Competition: The market structure in which a company operates matters. The analysis evaluates both the intensity of competition and along which axes companies compete
Growth: Examines the drivers of a company's growth, including market growth, cyclical recovery and market share gains
Risks: Unearths a range of risks to be wary of when investing, such as accounting irregularities, fad and fashion risk, and more
Disruption: Considers whether a company is at risk of disintermediation, or conversely whether it stands to capitalise on societal shifts
Balance Sheet: Put simply, avoiding potential bankruptcy is a prerequisite for any investment
Management: From Jensen Huang to Jeff Bezos, visionary founders can make a significant difference in a company's trajectory

In addition to the qualitative analysis, I have also built a scoring framework along the same 8 dimensions. This translates the qualitative deep dive into a single score out of 100 that allows for easy comparison between companies. And to take it one step further, I have also added a screener which can help unearth potentially promising stocks to research further.

The initial database covers 1,000 stocks, with plans to expand over time. If there are any stocks you are interested in that aren't yet included, there is a form on the screener page where you can submit a request and I will add it as soon as possible.

Finally, a word about my personal investment philosophy and how this tool fits in. I don't believe in the traditional schism between value and growth. I want both. My ideal investment is a wonderful company that you acquire at a cheap price and let compound over time. My personal best investment was buying Meta in October 2022, which fits this profile exactly. RebelAlpha is designed to help you find those wonderful companies.

Then it is just a matter of being patient until the market provides you with an attractive entry point, but with that I cannot help I'm afraid.

Happy stock picking!