YIJ 02: First Investment? My McDonald’s Musings
What Company Should I Start With?
The first company you invest in doesn’t have to be some obscure, hidden gem — it can be something right in front of you, a brand you know or even one that’s nostalgic.
For me, that’s McDonald’s. As a full-time National Serviceman (NSF) here in Singapore, the sight of those Golden Arches after a shag week of training is so welcoming for many in my platoon, myself included.
There’s an almost magnetic pull as we eagerly anticipate using up our McDonald’s points on that first well-deserved meal after booking out.
It’s during moments like these, seeing this consistent pull, that the questions start brewing:
What makes McDonald’s so timeless?
What gives this global giant its incredible staying power? From our childhood birthday parties to our post-training cravings today?
And the big question for this blog, does that enduring appeal make it a potentially good investment?
My Initial Observations:
The Gut Feel
Before diving deep, it’s always good to jot down those first thoughts — the surface-level stuff. Based on just being a regular customer, here’s what I see in McDonald’s:
A Strong Brand: Those Golden Arches are instantly recognizable worldwide. It’s a symbol of familiarity.
Broad Appeal: From kids clamoring for Happy Meals to adults grabbing a classic Big Mac or enjoying local specialities (McSpicy for us Singaporeans), they seem to cater to almost every age group and taste.
Consistency: Generally, you know what you’re going to get at any McDonald’s you walk into — whether in Singapore or San Francisco.
Value: Often, especially with their value meals, it also feels like a reasonably priced option.
But are these initial thoughts enough?
Time for Further Analysis:
Beyond the Happy Meal
Here’s the thing: a good meal or a strong brand doesn’t automatically make a company a great investment. My gut feelings are just a starting point.
To make informed decisions, we need to go beyond these observations and look at the business with an investor’s eye. This is where the real work (and fun!) of company analysis begins.
That’s why, over the next series of posts, we’ll be using McDonald’s as our first YIJ Case Study! We’ll dig into the business to see if it is truly a “YIJ-worthy” investment.
Finding Our Facts:
Where the Real Info Lives
Understanding a company like McDonald’s properly needs more than a quick Google search or scrolling through social media. We need to go to the source. For publicly traded companies, these are the primary resources:
The Investor Relations (IR) Website: This is McDonald’s official portal for its shareholders and potential investors. It’s where the company shares crucial financial updates, strategy presentations, stock information, quarterly earnings reports, and importantly, its annual reports.
The Annual Report (Form 10-K for US Companies): Think of this as the company’s detailed yearly report card. It’s often a dense document (we’re talking 82 pages in the case of McDonald’s 2024 Annual Report!) but it contains a wealth of information: McDonald’s performance over the past year, its detailed financials, key achievements, future strategy, potential risks and much more.
We can also look at secondary resources like reputable financial news websites (e.g. Bloomberg, Reuters) to get wider industry context or recent news. However, for our initial analysis, we’ll focus on the official information directly from McDonald’s — the unfiltered story.
Navigating the Information Overload: Our “Assistants”
Now we know where to find the info but let’s be real: these documents, especially the annual report, can look like an intimidating wall of text and numbers. It’s easy to feel overwhelmed — like trying to navigate a swamp without a map! This is where having some help to process and understand it all comes in handy.
Our First Assistant:
Artificial Intelligence (AI)
We can use AI tools (like ChatGPT and Google Gemini) as super-fast research assistants to:
Summarize dense report sections.
Explain tricky financial jargon we encounter.
Brainstorm initial questions based on what we’ve read.
It’s a great way to get a first pass at understanding complex information and make the data feel less daunting.
However, a big YIJ caution: AI isn’t flawless. It can miss vital context, misunderstand nuances and its knowledge isn’t a substitute for your own critical thinking. So, always treat AI output as a starting point and double-check everything against those primary sources!
Our Second Assistant:
Reginald, the Seasoned Guide
This need for critical thinking and deeper understanding is where our human mentor, Reginald, proves invaluable. After we’ve used AI for that initial processing or if we’re stuck on a concept, discussing it with Reginald helps us:
See the bigger picture and gain context that AI might overlook
Critically assess information by challenging our assumptions (even AI’s neat summaries)
Reginald won’t give us direct stock tips or ready-made analysis but he guides us in learning how to think like a discerning investor.
So, it’s a powerful combination: AI helps us process large amounts of information quickly and Reginald helps us interpret it wisely, ask better questions and build our analytical muscle.
What’s Next?
Let’s Get Analyzing!
So, we’ve chosen our first case study (McDonald’s), explored our initial gut feelings, identified where to get the hard facts and acknowledged our “assistants” — AI and Reginald — who can help us make sense of it all.
Now it’s time to start the actual breakdown. In our next post, we’ll be conducting a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to get a clearer picture of McDonald’s as a company.
Ready to follow along?
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Let’s keep growing together 🌱
— Nicholas
Watch this in action on Instagram!
