Day Three, Investing Brain Dump: Idea Generation
Where does Warren Buffett get his investment ideas?
Start with the As: The story goes that when a reporter asked Buffett where he gets his investment ideas, he replied that he reads annual reports and learns about every publicly traded company in the United States. “But there are 27,000 public companies,” the reporter responded. “Well,” replied Buffett, “start with the As.”
I don’t think I’m going too far out on a limb to suggest that Buffett’s advice is not particularly helpful to the average investor.
Newsletters
My primary source of ideas has always been investment newsletters. I have subscribed to numerous newsletters over the years. I consider newsletter analysts as cheap labor and am happy to outsource initial stock selection to them.
Complete Growth Investor is my favourite newsletter. The co-owners, Tom Jacobs and Jeff Fisher, pitch way above their price; providing great stock picks, investing and options education all for a low price.
The Motley Fool newsletters are mostly good value. Though as Tom and David Gardner step back from the coal face I am not as confident in the picks as I once was. Their new newsletters like Million Dollar Portfolio, Pay Dirt and Global Gains are all expensive and I question their value.
For Australian readers I can’t recommend a single newsletter. Australian newsletters are all overpriced.
Other sources
- Invest in what you know. Look around the industry you work in and spend your leisure time on.
- Keep you eyes and ears open. Good ideas appear from time to time and you need to be ready to recognise and capitalise on them. This definitely does NOT mean investing based on a tip.
- Transform your kids from cost centres into a profit centre by utilising their market research. From consumer gadgets to games to the latest craze your kids will be ten steps ahead of you. Did you buy your kids some Crocs? How about an iPod or Wii? Turn that pester power into profit potential.
The usual suspects
- VIC Value Investor’s Club
- Motley Fool boards
- Investor’s Business Daily
- The Value Line Investment Survey
- S&P its Small Cap, Mid Cap, and Large Cap indices.
- Stock screens – more on this topic up next.
The best place for long term ideas
TED Ideas worth spreading. TED stands for Technology, Entertainment, Design. The annual conference brings together the world’s most fascinating thinkers and doers. TED makes the best speeches available for free. Watching these videos is a great source of long term investment and business ideas.
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