Selecting Stocks from a Shopper Viewpoint

By Philip Usher


Making an investment in the stock market infrequently boils down to one essential element, namely good decisions. Irrespective of how well we do our research, how frequently we buy and sell, or how much we pay gurus for their tips and advice, without choosing stocks that represent value , we won't succeed. Although some are good at predicting the direction of the market and timing the ups and downs, if they do not purchase the right stocks, they will still meet with difficulties when trying to reap profits.

For that reason, some of the finest paid folk on Wall Street known essentially for their talent at picking stocks. Financial consultants give talks and write books and newsletters about the best way to select stocks that will outperform the market, and most gurus echo the same sentiment and agree that one of the finest ways to judge a stock is from the viewpoint of a consumer. By employing instincts we have already sharpened as ordinary shoppers, we will be able to frequently ferret out info that even the most talented and software-savvy market watchers miss. While they study logical charts, takings reports, and the exchange ticker tape, folks exactly like yourself actually conduct business with the firms they invest in, because their experience as a shopper speaks volumes about the value of the company and its services and goods.

Here are the sorts of things to go looking for as signals of a company's worth:

1) How popular is their service or product? If everybody you know uses it, and is pleased with such things as price, client service, and trustworthiness, the company is probably well situated among the competition.

2) Are the employees satisfied? One of the very finest ways to judge a company is by chatting to workers. Many corporations put on a good faade, but under the fancy marketing is plenty of discontent. But if employees like a company particularly if they like it enough to buy stock in it that's an excellent sign.

3) How well known are they? You may find a great startup company with all the accoutrements of success, but find that it is less popular. Many tiny or regional corporations are popular in their own back yards, but the rest of the planet may not yet know about them. Purchasing such unknowns can be a great way to invest in the next hot stock. If the basics look great, occasionally being less well-known is a great thing for stockholders getting in on the ground floor.

4) If they went out of business, where would you go for similar goods and services? If you can't think of a convenient alternative, the company is in a focused market that enjoys customer loyalty and repeat business.

Look around, and notice what you see and how each business causes you to feel. Then trust your intuition. Jot down a list of companies that get your attention, and then call their investor relations office and ask for all the details. By beginning your list with companies you currently have a first-hand experience of, you raise the chances significantly that you're going to make intelligent selections.




About the Author: