It’s 7:30 AM on a foggy, cold Saturday morning, and I’m starting my second cup of coffee (don’t judge, they’re small cups and I get an early start). The dog has been walked, and his Milk-Bone reward given. I like to think I’m a simple man and always take my coffee of choice, homebrewed Folgers, black. This morning, however, I’m enjoying a bit of the frou-frou Coffee-Mate creamer, which never happens. I swear.
I’ve had the itch to write more about this topic all week long and have been looking forward to the solace of an early weekend morning. And here I am, finally, writing on my Macbook Pro with the help of notes I took on a combo of my iPhone and iPad. I’ve turned off WiFi to eliminate the temptation to review my team’s production reports in Google Sheets and Google Drive, where the majority of our company’s data is now being transitioned to. Oh, and Microsoft Outlook has been shut down and hidden from my line of vision as well.
In the background, I’m streaming a muted Facebook live news show via Apple TV. Before my first cup of coffee, I told my Amazon Echo to turn on my lights and play a little classical music to, you know, set the mood. I normally start my day with reading for 30+ minutes on a Kindle or physical book, delivered via Amazon, but not today. I need to put the proverbial pen to paper. With the “Classical Focus” Amazon Prime Music station playing, I whisper, “Alexa, louder.” And so it begins.
Okay, if you’ve made it this far, that’s the last of my stage-setting. I promise there’s a reason for the lengthy setup and brand placement.
A mistake I made when I first started investing was to follow analysts or firms for ideas about who/what to invest in. I would see articles titled “Three Growth Stocks You Must Own” or “This Stock Promises Explosive Growth” and read them, obviously. And while there are plenty of analysts whom I trust and respect, the problem lies more with the recommended businesses. Chances are, you won’t have a clue about any of the companies mentioned. That means to get a clue, you’re going to have to do a ton of research. And like legendary investor Peter Lynch said:
“If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.” – Peter Lynch
My goal as an investor is not to spend a ton of time researching companies and potential investments, it’s to grow my money exponentially with as little effort as possible. The best place to start is with the companies you already know and use in your everyday life. The brands I introduced earlier are primarily massive companies that everyone knows, so you’re not going to find lightning in a bottle (you never know with Amazon), but you can definitely earn solid returns and have confidence in your investments.
“Make your portfolio reflect your best vision for our future.” – David Gardner of The Motley Fool
I want Apple, Amazon, Google, and Smuckers (parent company of Folgers and Milk-Bone) to continue their dominance in one area or another. For example, I’m counting on Amazon to make it possible for me to never step foot in a brick and mortar retailer in the near future. Furthermore, I’m betting on them to enable me to never step foot in ANY type of store. I believe in their vision and want to be a part-owner in their companies, so I buy shares, satisfying that desire. The same goes for companies like Apple, Google, Facebook, and others that are an integral part of my life and the lives of those around me.
This makes the decision-making process of who/what to invest in very simple. I buy shares of great companies who I believe will continue to grow for years to come, and I hold those shares for years to come. There is a small amount of fundamental analysis and research to do before buying (i.e., revenue, growth rates, price to earnings, market cap, etc.), but this is a lot easier to do when you’re not looking for hidden gems or short-term winners.
And who says you can’t find hidden gems or explosive growth companies? Don’t forget about your unique skills and interests that give you a competitive advantage in the market. So take a look around in your life and take note of the products and brands that positively impact your life. Are others impacted the same way or do they share the same need? Could that lead to profits for years to come from these companies? These are great questions to start with when looking for your next (or first) investment.
Final disclaimer: I may own shares in the companies I mention and this guide, or any other investing and finance-related information on masonwoodruff.com, is not intended to be investment advice.