People often ask me where do I get my investment ideas. At first, I answered in the typical academic manner, “I dunno.” But I realized that perhaps I should be able to articulate my investment strategy so that I can help you develop yours. So here goes – my top 3 ways to find stocks:
- I am selfish. If I buy something and am passionate about it; I like to own the stock too. I mean why shouldn’t I profit from my own consumerism? And I know that the things I buy are environmentally, socially and well-governed companies if they have earned my consumer dollar… so it only makes sense to invest in them so my RRSP (401K) can profit as well.
- I listen. As a writer, I love to listen to people and hear what is important to them. It gives me an idea, a new trend or a sell signal. For example, if someone says that a sector has been laying off to manage profitability, that means the company is looking for short-term answers to problems. That is not the kind of company that I want to stay invested in. BUT if I hear that a company is hiring or a sector is growing, that is a sign to check it out and to look for those that have growth potential.
- I look. Companies who are investing in affordable marketing and advertising are working to get the brand out there. The key is affordable. So when I see a company advertised and I like what I see from a corporate social responsibility perspective – I check out their SG&A. SG&A is an acronym for Sales, General and Administrative expenses. This is a key management measurement that financial analysts use to determine how well a management team is performing. You can find this number on the Income Statement. If it is high percentage relative to its competition, you may want to avoid this company and look to buy its competition’s stock.
So in summary, I guess I do know:
- I buy what I use.
- I listen for opportunities from real people.
- and I check to make sure that the company is financially responsible.
How do you pick stocks?
yours in Corporate Social Responsibility
Cara MacMillan MBA