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 actually find stock investment 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 a psychic or insider trading (in which case really not a tip to follow), no one actually knows for certain where a stock is heading. So get some initial ideas and then use Google Finance, CNN, Forbes, news articles, 10Ks, this site, etc to do you own due diligence. Here are some methods I use:
1. Start with companies you already like
When I first started investing, one of the first companies I made a large investment in was Lululemon (LULU). My interest in Lulu didn’t start with chart analysis or technical reviews, 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. This seemed like a pretty good business model to me. By the way, this was also before the “athleisure” trend exploded.
So I looked up the stock on Google Finance, read some articles about it, and read their 10K. Turns out they 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 investments (to be fair, I loaded up on more during the sheer pants crisis). Companies whose products you use are a smart place to start because it means you’ll better be able to understand the business model, plus it might mean you’ll be more interested in and be willing to put more time into the research. That’s why I recommend you start reading up on places you actually shop, whether it’s Apple (AAPL), Nordstrom (JWN), etc.
2. Follow the Experts
Imitation is the best form of flattery. Why not flatter some high profile investors, like my beloved Warren Buffett, by looking at what stocks they’re investing in. Investment managers (i.e. Berkshire Hathaway) file 13Fs, not to mention a quick google search on Buffett will pull up articles in which he talks about what he’s investing in. Plus, you could always follow Carl Icahn on Twitter.
Again, don’t forget your own research, even if that means you wind up deciding you disagree with Warren Buffet’s investment decision.
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, Bloomberg, 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, so you can stay up to date on news that may move prices in the future.
4. Check out Blogs and Forums
Besides from staying up to date on The Day Tradette, 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.
You can also get your tips in app form, via 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. Just keep in mind that very few people tweeting are actually experts, so take what they have to say with a grain of salt.