Saturday, September 7, 2013

Whats "HOT" Around You?!

Hello readers, new and old! I have returned. First off- I want to apologize for the hiatus. Some of you may or may not know I am in Business School while working full time and Fall semester is upon us.  I've had a lot going on to say the least.  But nonetheless, here I am! I am starting to feel like I should be awarded a PHd rather than an MBA degree when I am done with this madness.

But anyways, just wanted to share that I recently enjoyed yet another issue of Kiplinger's personal finance magazine which I read cover to cover because I am a geek obsessed with finance. The October issue had some interesting articles which had my undivided attention because I was able to relate them to some of my personal investing strategies, and learned quite a bit in the process! Check out the October Issue:

Today I want to share the methodology behind one of the articles focusing on one of the ways we can go about finding our new “gem” or “gems” when it comes to profitable stocks: Be aware of what’s “hot” around you.

In the article "Spotting Winning Retail Stocks at the Mall" written by James Glassman, he provides us with a list of some of the "hot" companies he has spotted while doing something as simple as observing his surroundings while at the mall. He provides a list of ticker symbols for the corresponding companies such as LVMUY (Louis Vuitton, owners of Sephora), IDEXY (owners of Zara), and HESAY (Hermes International), just to name a few, as well as an explanation based on research of WHY these companies can be profitable for our portfolios. 

So, what the heck do I mean by “what’s hot?” Well, when we go to the mall or shopping centers in general it is usually very noticeable which stores are more popular than others. Aside from weekend sales or promotion, there are always those “go to” stores that people like to stop by no matter what. Or, those up and coming stores (or products) that people cant stop talking about.

Think about this: which products or stores are hot among your group of friends, co-workers, acquaintances or even your children? (if you have any). Taking notice of popular products can give you an insight in terms of where you should be putting your money or where you should be doing that “extra step” of research before you go ahead and confidently take the plunge.

As I’ve mentioned many times on the blog, investing is not rocket science. Choosing companies is not rocket science either. Is just a matter of taking the time to "study up" those companies that catch your attention and staying ahead of the game.

The weekend is here and many of us may stop by the mall to get a few things. I encourage you to do a something a little "different" this time around and make a conscious effort to really notice what’s popular around you or which stores your wife, husband, kids, friends or random stranger behind you on the escalator says they "need to go to". 

Then, when you get home later on (or right on your cell phone notepad) take a minute of your time and make a list of these companies. If it’s a particular product(s) find out who makes them. Then, let the research begin! Start “doing your homework" on those companies. I am not saying you should spend months or years watching those companies but simply add it to your watch list for a bit while you do your research and then go ahead and make your investment decision!  

Read anything and everything you can get your hands on about these companies on the web from their current share price to company news, etc. A website such as yahoo! Finance, is probably a good place to start. Does the company(ies) pay dividends? How long have they been around? Do they have any products coming out? Do they have any lawsuits against them currently? Any issues? Do your research and then go confidently in the direction of your profits. You may decide for or against them but as long as you do your research you'll be on the right path.

Do not gamble. Do your research, do your homework (cant say that enough).

Thanks for reading and Happy investing!!!

I’ll leave you with a quote which really hits home but Im seriously not sure who said it first (if you know, shoot me an email or comment beloe and let me know):

“Invest in companies, not in stocks”. 

Disclaimer: I received a complementary 1-year digital subscription to Kiplinger personal finance for the year 2013. However, ALL opinions expressed on this post are my own. I do not currently own any of the stocks mentioned in this article.