47. Olli Koponen
In my opinion, Olli has the best jokes at Inderes, but there are plenty of other great things about Mr. Koponen; he is naturally an excellent analyst, but also someone who clearly has a broader understanding of the investment and economic world. He and his namesake, Olli Vilppo, share something in common as analysts, and I think it’s that certain realistic, “down-to-earth” attitude, which is one of the reasons they are so well respected.
You don’t have to guess what Koponen is thinking when you listen to him or read his writing, because I feel he expresses his thoughts very clearly without leaving anything to be read between the lines. He exudes a broad knowledge of the investment world, and Olli also seems to possess a great deal of general knowledge, which certainly serves him well in his work as an analyst. In my view, these aforementioned qualities shine best in his extensive initiation reports.
The Olli fan club will certainly be pleased, as it hasn’t been long since the interview with the other Olli, and now I’m already publishing Mr. Koponen’s interview, which you can read below:
1. Tell us who you are in thirty words.
A 34-year-old young man with a Kainuu mindset. Passions include all kinds of sports, all-encompassing investing, and economics. Favorite foods include lasagna and Karelian pies. Living in eastern Helsinki with my wife.
2. Tell us three things the forum members don’t know about you.
I worked in the construction industry for many years, I sing in a band, and I enjoy early mornings.
3. What interests and hobbies do you have? You cannot mention anything related to investing.
My hobbies are largely sports-related. In the summer, I cycle, run, and swim, and participate in triathlon and cycling events. I play tennis relatively actively. In the winter, cross-country skiing (classic is the only real style), the same endurance sports indoors, and I also frequent the gym. I could play more video games if I had the time. I also watch sports, from esports all the way to cycling races. Cottage life and outdoor wilderness activities are great fun too.
4. What does a typical weekday look like for you?
I generally wake up early and head over with my coffee to read the evening or overnight news from the US markets and Asia. I check the charts and reflect on where the market is going. I track corporate events from the morning and get ready to head to the office or stay home to work remotely. In the mornings, I like to do research and write in peace when distractions are at a minimum. After the morning, I might do some physical activity midday and return to work after lunch. In the afternoon, I often leave the office for my home setup, but the evening is frequently spent on the stock market and work until 7–8 PM. During earnings season, days start earlier and run longer, and breaking news can completely upend the calendar, but flexibility is one of the best aspects of the daily job.
5. How would you describe yourself as an investor?
I am an owner, investor, active trader, swing trader, and speculator. I utilize fundamental, technical, and systematic methods. I’m not afraid to take risks, but I always aim to size my positions relative to the investment’s risk profile. I don’t invest exclusively in equities; I keep an open mind to other asset classes as well. Most of my wealth, however, is tied up in stocks. I strive to own companies that can generate strong returns on capital over time. I don’t care much for dividends and prefer growth. More on this topic later.
6. Could you tell us about your investment history?
I started after the financial crisis. Pessimistic times. Fears of a double-dip recession loomed, then the European debt crisis hit. Initially, I held stocks for short periods and also favored various funds. A few memorable duds stuck in my memory from back then (like small Canadian oil companies). I have surely made every possible investing mistake and fallen for every behavioral anomaly associated with investing. Later on, I became increasingly interested in economics thanks to my investing hobby, and eventually decided to make a career out of it. Investing became more rule-based, and third-party research was replaced—or supplemented—by my own research. My mindset has also shifted to be more long-term. Still, the portfolio contains different allocations ranging from short holding periods to long-term ownership.
7. How has becoming an analyst changed you as an investor?
The quality of my research has improved, investment decisions are better substantiated, and holdings are more long-term. Additionally, I can evaluate different sources more critically. My financial ratio and valuation expertise has developed. My ability to read reports has advanced, and taking key factors into account has improved.
8. Is it sometimes tough to cover underperforming companies, like the construction companies under your coverage, e.g., Lehto and SRV? And on the flip side, can an analyst easily look at the companies they cover through rose-tinted glasses, or at least with more optimism and positivity?
Of course, you always hope a company does well, because that makes your own job easier too. In that sense, tracking the cyclical construction sector is sometimes arduous and forecasting is often challenging. I wouldn’t say things are viewed through rose-tinted glasses; if anything, rather more critically than by the general public.
9. You take a broad perspective, have solid general knowledge, and seem to have a good grasp of macroeconomics. Have you been able to leverage these “qualities” when analyzing companies? If so, how?
Macroeconomic expertise—or above all, interest in it—certainly helps in understanding market movements. Furthermore, outlooks for interest rates, inflation, employment, and the broader economy have a significant impact specifically on the construction industry, which is a cyclical sector. However, tracking macroeconomics is more of a personal interest than a strict necessity in equity analysis. In certain cases, emphasizing macro analysis too much takes the focus away from the core: analyzing the company’s business model. I use macro mostly to gauge general stock market and financial market movements.
10. Would you like to share what your portfolio looks like, and what your three largest holdings are?
The portfolio is heavily weighted toward Finland, as I see that I might have a competitive edge here compared to the rest of the market. However, international holdings include gaming company NetEase and Shopify as a fairly recent addition.
Inderes is my largest holding; rounding out the top three are Remedy and Viafin Service.
11. Tell us in thirty words per company what you think of these stocks:
- Viafin Service
An industrial maintenance provider boasting very strong growth and operating on a highly cash-flow-rich business model. An unglamorous sector with growth and consolidation potential. Valuation is low given the strong net cash position, though an uncertain project market slightly elevates risk.
- Wulff
A provider of workplace products and services. Doubled its scale via an acquisition whose fruits will be reaped in the coming years. Margin expansion potential through synergies, but overall market growth is sluggish, keeping the valuation depressed. Even with modest performance, the valuation is very low.
- YIT
The largest and historically most stable construction firm on the Finnish exchange. Currently suffering from residential construction headwinds and a large inventory of unsold completed apartments. Higher potential, but balance sheet, financing, and housing market uncertainties weigh more heavily on the risk side than the potential upside.
12. What does your stock-picking process look like step by step?
Apologies for the long answer, but first a few thoughts in general.
Personal emotions and psychology often lead to poor decisions regarding both buying and selling. Therefore, it is very important for an investor to have a plan and a strategy for how they want to accumulate wealth and a nest egg for the future. That’s what it’s about for most people: accumulating enough wealth to become your own master down the road. Building a large enough nest egg to retire early.
Well, maybe that’s someone’s dream. Lazing in a hammock for the last 30 years of your life. Personally, I enjoy following the markets and trying to beat the other “players” out there. It’s the toughest game or competition in the world. You are up against the smartest individuals or teams on the planet. Funds with infinite resources, or market veterans with decades of experience. This is especially true if you choose to compete in the largest asset classes among the most popular stocks or commodities.
If you want to succeed in stock picking, you need to find an edge in the market. I don’t—at least not yet—possess magical coding or data analysis skills to forecast Apple or Amazon better than others. Therefore, one must focus on areas the big players can’t be bothered with. Or find a solid target and maintain a sufficiently long holding period for the stock market to work its magic.
With stocks, I focus on the long term and aim to concentrate mostly on the domestic stock exchange, where I might have an edge as an equity analyst covering it. However, I also own international stocks, as the simple reality is that the best companies can’t all come from Finland. I can seek geographic diversification through foreign ETFs or funds in markets where I see pricing undervalued relative to potential (e.g., emerging markets).
I also invest in other asset classes, including crypto assets. Saying “invest” might sound improper, but at least I’ve speculated on the future value of crypto assets. You can’t assign much real-world utility value to them yet, but going forward, I see the world shifting away from centralized services toward decentralized systems enabled by smart contract platforms. The Internet was built on various protocols that no single entity truly owns. In the current Internet era, value accrued to the platforms and applications utilizing the Internet, like Google, Apple, or Amazon. All leverage the Internet protocol and capture the value derived from it. Over the years, these companies have become part of people’s everyday lives. In the process, they’ve captured significant amounts of human data and monetized it without compensating us. They can also decide who gets to use their services, and what it costs.
Conversely, imagine a world running on a protocol—a system upon which thousands of applications are built that no one owns. You are part of a large network where you control your own data, can sell it to those who need it, and can access the same services as everyone else. You can watch ads you choose to watch and get paid for it. You can stream music from a platform using micropayments, routing compensation directly to the artist. You can rent a vacation home without paying hefty intermediary fees. You can own a slice of Manhattan real estate for a few euros. Built into all of this is an incentive mechanism that encourages people to police honest behavior or punishes bad behavior. The incentive mechanism also governs the smart contract platform required to build these decentralized applications, making all this possible. Imagine being able to own the asset that powers the future Internet, secures it, and pays for its network fees. You can’t own the future Internet itself, but you can own the asset required to run it. If demand for this future Internet grows and users and developers adopt it, the asset’s value rises via its internal incentive mechanisms. Ultimately, it comes down to supply and demand.
Sure, this vision is still utopian and things could play out in many different ways. However, it’s good to keep an open mind to new possibilities, and through this framework, I’ve assessed that these assets might one day hold value beyond mere speculation.
Equities
When it comes to stocks, I primarily focus on a long-term investment horizon. I also take positions in a short-term trading portfolio, but my main focus is on long-term holdings. My view is that you can’t get 10x returns with holding periods of a few weeks or months—or at least it’s as unlikely as striking it rich on slot machines or the lottery. This holds true at least in the relatively efficient equity markets. Don’t get me wrong; I don’t believe markets are fully efficient. Otherwise, I wouldn’t have a job. Below are the optimal investment criteria for stocks I’d like to own:
Long-term investment criteria:
• The company must possess a competitive advantage
• The company must operate in an attractive market
• Megatrends genuinely support the narrative
• The company must have solid future growth prospects
• Over the long term, dependence on key individuals should be minimal
• The business runs independently of management, though high-quality leadership is a major plus
• The product or service must be top quality
• Network effects are a plus
• Scalability is a major plus, but not mandatory
• An interesting company is a major plus
• Maximum of 15 holdings
• Key metrics: growth, profitability, return on capital %
• Valuation: attractive
Not all criteria are met every time, but the more, the better. Long-term companies are, in my view, best characterized as growth companies. I don’t care about dividends (even if everyone pays them), because I see the taxation on them eroding potential returns. The compound interest effect is real, but it works much better if I don’t have to pay taxes along the way. I’m at a life stage where I want to back companies that grow and reinvest their cash internally to compound. The time for value stocks (or perhaps deep value) will come, but I see that more as a trading opportunity rather than a long-term investment strategy for myself right now. I also believe the time for dividend/value stocks will arrive once I want steady cash flow for living expenses, but the time isn’t right just yet.
In the short term, I generally look for mispricings or trade around special situations. The short-term portfolio’s operations are heavily rule-based and criterion-driven. The long-term portfolio allows more leeway with timing and entry pricing. Being wrong is evaluated more on fundamentals, whereas in the short portfolio it’s managed strictly within the rules.
Short-term criteria:
• Clear mispricing in the stock
• Sentiment at rock bottom or turning
• A catalyst that resolves the mispricing
• Position size cannot exceed 10% of total portfolio value
• Predefined stop-loss level
• Predefined take-profit level, subject to discretion
• Trading execution must be viable at discretion
• Valuation: cheap
• Return expectation: +20%
I do less short-term trading simply due to compliance trading restrictions and time constraints. Being able to trade the stock actively is essential. In this sense, the Finnish stock market is less suitable for this given our compliance rules.
Do I follow my investment strategy 100%? No. Is there room for improvement, or do I stress about it? There is room for improvement, but I don’t stress over it.
13. What are your most important sources for tracking macroeconomic trends?
I follow Twitter closely as a news channel, and naturally try to find people smarter than myself on there. Bloomberg and Lombard’s macro overviews are also in use. Several investors and fund managers publish regular reviews that I read. Economic data is available across many platforms, and I track several charts via links in my own Excel setup. For tracking stock market charts, there are also many great free tools, such as investing.com or Koyfin.
14. What do you enjoy most about an analyst’s work? What do you enjoy the least?
Gaining key insights, beating the market, and evaluating market movements. What I like least is being wrong.
15. You have to hand your portfolio over for five years to two Inderes team members who are not analysts, and two forum members. Who would you pick and why?
It’s a tough choice, but I’ll use a cheat code and first pick Mikael Rautanen, who is our CEO, but no longer an analyst. Having watched Mikael up close for years, I’d gladly trust him to manage my portfolio.
Second, I’d choose a hybrid of Verner and Erno. Verner has a broad understanding of the markets and, as I understand it, invests partly in companies similar to my picks, while Erno and I have shared similar investment ideas ever since our university days in Kuopio.
From the forum, it’s an exceptionally difficult choice, but let’s go with a mix of shorter-term trading from DaytraderXL and solid stock picks from PohjolanEka.
(ping: @DayTraderXL, @Erno_Hilvenius, @Mikael_Rautanen, @Pohjolan_Eka, and @Verneri_Pulkkinen, tagged you so you see you were mentioned 
best, alokas)
16. Excluding the threads for companies you cover, what are your favorite threads on the Forum and why?
Stock Market Direction and the Meme Thread / Coffee Room.
The Stock Market Direction thread has great insights and news on macroeconomics and general market trends, and the memes are just plain fun.
17. What goals do you have for your investing? How have you tangibly benefited from the wealth generated through investing?
Goals certainly include securing my future retirement and personal financial footing, as mentioned earlier. It has definitely brought a sense of planning and peace of mind, though it’s still early days to speak of genuine wealth.
18. What is the best part of working at Inderes?
Great colleagues, a business mindset geared toward growth and development, plenty of challenges and opportunities, autonomous work, and flexibility.
19. How could Alokas learn to analyze companies better independently?
By reading research and making good equity investments. By conducting these interviews.
20. What would you like to specifically thank the forum members for?
For the exceptionally active discussions, great pushback, and the pleasant atmosphere. You, the community, are ultimately what makes Inderes what it is today.
Thank you for the fantastic answers, Olli! 
Investing doesn’t necessarily have to be overcomplicated, nor do you need to split hairs, but looking at things from a broad perspective is certainly worthwhile. Olli didn’t say it in those exact words during the interview, but that’s the impression I got reading his answers.
In my view, the answers from Olli and the other interviewees are hugely useful—and free on top of that—so go ahead and absorb the lessons.
Have a great weekend, everyone! 