Stock picking isn’t dead. But for most investors it might as well be. In this special, a pair of high net worth investors talk about finding great opportunities in the stock market through an insider tip. The secret: you don’t have to be a “big investor” to find a great stock.
A few months ago I spent some time with a group of high net worth investors. Every couple of months we met as a group to go over our financial and investing plans and talk through what we might want to do in the future.
We all had something in common. Every single one of us had picked up a stock in an “under-the-radar” way-in a way that wasn’t necessarily what you’d call a “regular” investment. Rather, it was an investment that wasn’t part of our investment plan for that year. By the end of our quarterly meeting, we decided on a list of companies where we wanted to buy.
But what is an under-the-radar investment? An under-the-radar company is an investment that hasn’t made a big splash in the past, or is just starting to attract attention. Or perhaps it’s a company that’s just starting to build an industry.
For example, say you’re an investor who hasn’t purchased a company in about a year and a half. You might buy one of Apple’s recent products, like the iPhone or the iPad. Or maybe you pick up a stock like Netflix.
Or you might buy, say, an oil company where you already know how the business works. Or you might pick up a biotech company like Bristol-Myers Squibb or Roche.
The key, of course, is that most of these companies have been overlooked by other investors. And so we’ve decided to buy stock in these companies. All of us have been so lucky that the companies we chose are worth hundreds of millions or even billions of dollars, and we’re not “regular” investors. But here’s the thing: we could have easily bought these companies without any insider tip.
We have made good choices based on very little information. It’s the first time in decades that I’ve actually done something like this. And every single piece of info I’ve used to pick these companies wasn’t that “secret tip.” But it was all based on facts I couldn’t see, and so most of the information was already made public.