Apparently there are over 10,000 publicly traded stocks. That means the trading possibilities are close to endless. Exciting yes, but also overwhelming. So how in all this do you find investing ideas?
I have a few “go to” places I start with to find ideas. The key though is to never take any “advice” at face value. Unless they’re insider trading (in which case really not a tip to follow), no one actually knows where the stock is moving. So get some initial ideas and then use Google Finance, CNN, Forbes, news articles, 10Ks, etc to do you own due diligence. Some methods I use:
1. Research companies you like
When I first started investing a few years ago one of the first companies I invested in was lululemon. My interest in lulu didn’t start with technicals or revenues, it started with clothes. Namely, my (expensive) addiction to their clothes. And every time I went into the store, I noticed it was crowded with other loyal fans who suspended reason for just long enough to buy $88 yoga pants. To me, this seemed like a good business model.
So I looked up the stock on Google Finance, read some articles about it, and read their 10K. Turns out they were have one of the highest sales per sq foot in retail (even higher than Neiman’s). To this day, LULU has been one of my most profitable stocks and my trades fund my new workout clothes. Win-win. I think actually liking the comapny means you’ll put more time into the research, so I recommend you start reading up at places you actually shop, whether it’s Apple, Michael Kors, Nordstrom, etc.
2. Follow the Experts
There’s a reason Warren Buffett is so successful. Investment managers (i.e. Berkshire Hathaway) file 13Fs, plus a quick google search on Buffett can show you what he’s investing in. Plus, you could always follow Carl Icahn on Twitter.
3. Read the Paper
There’s pretty much no better place than news websites if you want to know what trends are going on in the market. Check out Forbes, Wall Street Journal, CNN, CBNC, Businessweek, etc.
Another good place to get news is through Google or Yahoo Finance. On each stock’s page there is a list of recent articles discussing the company.
4. Check out Blogs and Forums
Besides from reading this blog (shameless plug, sorry), there are a ton of investing sites out there with many contributors and trading ideas. Sometimes these can get a bit technical and hard to understand, but they tend to be well researched and generally strong ideas. My favorites are Seeking Alpha and Motley Fool.
My new favorite app is StockTwits. It’s the same idea as Twitter, but just for stocks and investing. I try and check out the “trending” page every day. It generally shows what the biggest movers in the market are that day, or what people are excited about. I also check out the streams for stocks I am actively trading or following, as people often post ideas or links to articles.
Hope this helps as a start!