Byte #62: Don't Outsource Your Thinking

Dear Readers,

One of the best ways to improve as an investor is to expose yourself to different viewpoints. That's why I regularly listen to various investment podcasts, taking in the full argument.

I learn something from almost every one of them - new ideas, new themes, or simply the types of questions that sharpen an investing framework.

But I caught myself asking this important question:

How much weight should I give to someone else's conviction? And more importantly - how do I feel about their opinion?

A few months ago, I listened to an in-depth analysis of Microsoft. They concluded that Microsoft is still an elite, wide‑moat business, but the risk–reward profile in 2026 is too uncertain - especially around AI’s impact on Office, margin pressure from massive AI capex, and a weakening strategic position in the OpenAI partnership.

They acknowledged Microsoft was probably undervalued relative to historical multiples, but they didn't think it was so undervalued that it compensated for all of the uncertainty surrounding AI.

Fast‑forward to a recent episode from the same analyst - this time on Intuit. This time, the conclusion flipped. Intuit was investable. AI fears were overblown. The moat was intact. The valuation was irrationally cheap.

And that’s when I paused.

Why does the logic apply to Intuit but not to Microsoft?

If AI is a meaningful risk to Microsoft's productivity software, shouldn't I also ask how AI could reshape accounting software?

If QuickBooks' switching costs are a strength, shouldn't I also consider Microsoft's enormous enterprise ecosystem and switching costs?

If AI can’t replace QuickBooks, it won’t replace Office - because Office is even more essential.

I wasn't looking for the "right" answer.

I was looking for logical consistency. Because, if:

• QuickBooks is considered deeply entrenched, Office is arguably even more entrenched.

• QuickBooks benefits from high switching costs, Office likely has even higher switching costs.

• QuickBooks has earned customer trust, Office has built a broader level of global trust across businesses and consumers.

• If QuickBooks is widely used, Office is arguably one of the most universal software platforms in the world.

So, if Intuit is safe… shouldn’t Microsoft be safer?

If Intuit has a diversified business… isn’t Microsoft even more diversified?

And that’s exactly why you shouldn’t outsource your judgment.

Professional investors have access to more information than most of us.

They spend hundreds of hours researching companies.

But they could also have blind spots.

Just like you.

Just like me.

Listening to experts should sharpen your thinking - not replace it.

One of my investing regrets is talking myself out of a company because someone else's conviction became stronger than my own. That experience changed how I invest.

Today, I still read analysts report.

I still listen to podcasts.

I still value differing opinions.

But before I make-up my mind, I ask myself three questions:

• What do I think?

• Which assumptions do I agree with?

• If I disagree, why?

Sometimes I am convinced.

Sometimes I am not.

Sometimes I’m neutral.

Today, I treat every source as a starting point for my own research, not the final answer.

They give me ideas to investigate.

If I like a company, it goes on my watchlist. I write down my own investment thesis, identify the key risks, evaluate the long-term tailwinds, and decide whether the valuation makes sense. After that, if I'm interested but not fully convinced, I often start with a small position and let my conviction grow as I learn more.

Because the decision should still be yours.

At the end of the day, it's your capital, your risk, and your future.

Happy Investing!

Cheers,

Pooja