Investing from the First Principles

There are two variations of investment styles — top-down and bottom-up. In this essay, I argue that investing from the first principles is one of the most (if not the most) important things to do as an investor at any stage. To support this claim, I will first discuss the differences between the two types of investment approaches. Moreover, I will elaborate on the merits of the bottom-up approach and the shortcomings and common mistakes caused by the top-down approach.

The biggest questions to ask when investing (long-term) are: (i) What is the vision of the company…