We wrote our first post about American Apparel ($APP) on May 6, 2011. We view blogging as embracing entropy. By this I mean, the activity is more like throwing a handful of seeds in the air and see what takes hold overtime. When we go into it we have no assumption about what is about to take place. We have no clue really, but we embrace the pursuit of throwing seeds in the air. You just never know.
I often push the exercise further by reminding our trading group that we know nothing as a group and in order to discover profitable ideas we start with experimentation with no pre-conceived notion about the situation at hand. That is the upside of studying Physics -- Learning you know nothing very fast.
We just don't know, like we didn't know what would happen with the American Apparel series of posts. But yesterday, I got rewarded handsomely for all the hard work we put into the American Apparel ($APP) situation.
I was approached by an analyst at a firm that has a significant position in the name. I can't say more than this about who it is. He wanted to talk to us about American Apparel ($APP) after he read all our material on the company.
Our conversation was one of the most enlightening conversation I have had in ages. He knows the company inside out and it showed he had put a lot of work into it. Actually, much more than we did. You see, I don't get turned on about how stock prices move or how a chart looks like or what have you. I crave talking about the business, the customers, the products, the strategy, and so forth.
I like talking about its valuation and how big can this company be in 10 year, 20 years down the road. I like to mentally imagine the trajectory of the business at very long time scale.
Yesterday, I was like a kid in a candy store. I could have talked about the business for days. I could have listened to this analyst talk about the business for days. It was that exciting. Having this type of conversation helps me validate my investment ideas and get confidence to go in big when it makes sense.
All the blogging we do helps us connect with other individuals. Sometimes it takes a while to get the reward for the work, but it is usually worth it.
Written by Michael Bigger. Follow me on Twitter and StockTwits.