The Single Most Important Question When Buying a Stock

When thinking about buying a stock, there’s really just one main question that really matters perhaps more than any other:

Will this company’s earnings grow faster than the market expects?

Not just will earnings grow—but will they grow more than is already priced in?

That’s the game. The market constantly absorbs new information and updates its expectations. Stock prices reflect what most investors already believe will happen. To earn above-average returns, you need to spot a company where the consensus is too low, where future earnings will surprise to the upside.

This is the core of successful stock investing. Everything else is just supporting material.

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🎯 The Role of All Other Questions

Secondary and tertiary questions don’t exist for their own sake. Their only real purpose is to help you build conviction around the primary question.

Ask about:

• Competitive moats,
• Market share,
• Sector growth,
• Macro factors,
• Risks and uncertainties…

…but not because those things are interesting on their own. You ask because they help you better answer: “Is this business going to beat earnings expectations?”

For example:

• A strong moat might help protect margins and sustain future growth, making faster-than-expected earnings more plausible.
• A high-growth sector might act as a tailwind—but only if the company can actually capture outsized gains from it.
• An overlooked competitor could pose a threat, capping the company’s upside.

They’re all just pieces of a puzzle you’re solving to justify (or reject) the primary thesis.

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🧠 Don’t Lose the Plot

It’s easy to fall down rabbit holes—analyzing product launches, macro trends, balance sheets, and competitive dynamics. All of it can be useful. But only if it feeds back into that first, most important question.

If you find yourself focusing on details that don’t help you answer “Will this company outperform expectations?”, you’re probably drifting.

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📌 Bottom Line

When buying a stock, start with this:

“What does the market think will happen—and do I have a reason to believe something better will?”

Everything else—moats, sectors, risks, narratives—is secondary. Use them to build your case, but don’t let them become the case.

And once you own the stock, the question doesn’t go away. The only reason to keep holding it is if you believe the company will continue to beat future earnings expectations—not once, but again and again.

That’s the discipline.