Improve Your Concentration While Analyzing Stocks
Thoughts on how to achieve periods of uninterrupted and productive work

My returns as an individual investor are going to be only as good as the quality of my investment decisions.
The ability to focus is a key skill to be able to perform careful analysis and make better investment decisions.
How can you then improve your ability to focus while analyzing companies? How can you be more productive as an investment analyst or individual investor? How can you achieve uninterrupted periods of work with deep focus as Cal Newport calls it? In conclusion, how can you improve the quality of your decisions?
In this article, I’d like to share some of the best practices that I have collected over the years to polish that skill that is so necessary for any investor.
Introduction
Human attention is a scarce resource.
In case you hadn't noticed, there is a war going on right now to capture it.
It's you against all the big tech companies that have thousands of engineers whose only job is to keep you glued to the screen of applications like Instagram, TikTok or X (Twitter).
Have you ever heard the phrase that says if the company's product is free, it means "you are the product"? Of course, in companies like Instagram or TikTok, what they sell are "eyeballs".
And how can you maximize the number of "eyeballs" that you can resell? By making you addicted to their content, releasing small doses of dopamine every time you perform a behavior they want you to do.
The problem with these practices is that they destroy your ability to pay attention, your ability to focus, which is so essential for making good investment decisions.
Now, you're probably thinking, "I don't use Instagram or TikTok." But you likely have a smartphone, and this is a practice carried out by any consumer-facing technology company that wants to sell advertising to its advertisers.
Without going any further, I recommend you watch this documentary film available on Netflix. Now, what can be done to improve your ability to pay attention for long periods of time?
How Does the Ability to Pay Attention Work?
The ability to pay attention involves several cognitive processes that help us focus on specific stimuli while ignoring others. Here’s how it typically works:
Selective Attention: This is the process of focusing on a particular object or task in the environment for a certain period. It allows you to select important information and filter out irrelevant or distracting stimuli.
Sustained Attention: This refers to the ability to maintain focus on a single task or activity over a prolonged period. It's crucial for tasks that require ongoing concentration, such as reading, studying, or driving.
Divided Attention: This involves the ability to process multiple sources of information at once or perform more than one task simultaneously. Although useful, it can reduce the quality and efficiency of work if overused.
Executive Attention: This aspect of attention relates to the management of cognitive resources to achieve specific goals. It involves planning, decision-making, error detection, and adapting to new conditions.
Each type of attention supports various daily activities and is influenced by both external factors, like the environment, and internal factors, such as motivation and fatigue.
Here, I’m interested in our “sustained attention” capabilities. This type of attention needs momentum to develop. You may have noticed how your attention intensity increases as the hours go by.
On the contrary, if you are quickly changing tasks, the brain takes time to adapt, since it has to "load" all the relevant information about the new task into working memory and delete the information from the previous task.
That is why when I analyze a company, I prefer to schedule whole day chunks, or even whole weeks if possible, to avoid any type of context switching.
So, as the hours go by, the ability to focus and pay attention to the analysis becomes more and more intense. This happens because you have all the data and information in your head, allowing you to enter a state of flow.
To fully apply these principles, I aim for uninterrupted 4-hour periods, one in the morning and one in the afternoon.
Basically, the process is as follows.
Time Blocking for Fundamental Analysis
Plan the night before: Have the annual reports, transcripts of calls, and all materials ready on the table with a pen and paper.
Remain seated: Ensure everything, including snacks, is ready on the table. Do not get up before the first hour and try not to get up during the whole 4 hour period.
Hide your phone: Activate Focus Mode and hide it, create as much friction as possible between you and your phone.
Give rewards: Plan something enjoyable after completing the 4-hour block. Watch a movie? Practice sports?
Stablish standards: If I can manage 4 hours, then I should maintain those blocks or even increase them.
Vary the environment where you work: Do research in cafes, trains, parks, etc.
If you consider the ability to maintain a regular routine like this twice a day, in a good frame of mind, a skill will start to develop.
The idea is to make the most of periods of uninterrupted attention, without social media, email checks, or phone disturbances. This way, it's easier to enter a state of flow.
If you allow yourself to be constantly interrupted, the following happens:
On the other hand, if you work in uninterrupted blocks of at least 4 hours, then your ability to focus increases exponentially.
If you are checking WhatsApp and five other applications simultaneously, you will never achieve the level of productivity and focus that you could develop using your full potential.
Multitasking is the enemy of deep work.
Even if you only use your laptop to work, the level of micro-distractions we face today is far beyond the historical norm. Do you remember the last time you sat down for a couple of hours to read a book?
Instead of starting with four-hour blocks, you can start with shorter periods and gradually work your way up, but always aim to minimize distractions.
Research the Pomodoro Technique on the internet. It relates to this topic. But above all, start with time blocking; that's what's important.
Remember: the quality of returns as a private investor is directly proportional to the quality of your investment decisions.
Tools for Improving Attention Span
Below, I share with you some tools that have helped me improve my ability to concentrate.
Time Lock
Use Apple or other time-blocking tools. Block the use of addictive apps for periods of time.
Focusme.com is another tool.
Accountability
Even if you work alone at home, today there are several ways to achieve that sense of accountability:
Tell a friend your goal and put some money on the line.
Hire a coach.
Follow a "Study With Me" or "Work With Me" YouTuber. Don't know what that is? Look it up on YouTube. It's exploding.
Create an account at Caveday.org.
Entering the Zone
Trying to get into a state of flow? You can try the following:
Ear muffs or headphones for listening to movie soundtracks, classical music, coffee shop sounds, rain sounds. There hundreds of playlists on Spotify.
Drink matcha or yerba mate tea instead of coffee. You will have the alertness without the typical crash.
Meditation. You will begin to have more awareness of your internal states. Download the Waking Up app by Sam Harris.
Looking Toward Your Future
Now you have the tools to achieve greater concentration. Being productive while working alone is challenging; you are on your own.
Doing research for an investment thesis could take long hours if you don't set clear objectives and deadlines.
If you apply the techniques and use the tools shared in this article, you will be one step closer to becoming a more focused individual.
Read More
Newport, C. (2012). So Good They Can't Ignore You: Why Skills Trump Passion in the Quest for Work You Love. Grand Central Publishing.
Csikszentmihalyi, M. (1990). Flow: The Psychology of Optimal Experience. Harper & Row.
Newport, C. (2016). Deep Work: Rules for Focused Success in a Distracted World. Grand Central Publishing.
Newport, C. (2019). Digital Minimalism: Choosing a Focused Life in a Noisy World. Portfolio.