There are roughly 19,000 publicly traded companies in the United States of America. With that many companies how is your average investor supposed to find great investment ideas?
In 2014, there were more families that owned cats than stocks. With so many potential companies to invest in, it’s no wonder people are reluctant to start investing in the stock market.
When I began investing in stocks regularly in my early 20’s I faced the same issue. I used to ask people all the time if they had any great investment ideas. I always heard the same obvious answers, Walmart, Bank of America, Apple. These are all great companies, but as an investor, I want to buy low and sell high. As such, I needed to find stocks that weren’t on everyone’s radar.
I’m not alone in my thinking. Most recommendations you’ll find are big companies that are closely followed. These stocks often don’t carry much margin of safety. The trick to finding great investment ideas is to find little known stocks, trading at a discount to their book value. To find these you have to do some digging.
Here are 12 cheap places to find great investment ideas:
2. BizJournals.com – This site does a good job covering the whole United States, but I like it because there are also local journals. Local Journals will often cover smaller companies that would be of interest to local citizens but not necessarily interesting the the entire nation. These are gems for value investors.
3. SEC.gov – The site is free and full of all filings from public companies. Click the “Latest Filings” tab to find the most recent filings. In this list each day you’ll find dozens of companies you’ve never heard of.
4. Google Finance Stock Screener – You can screen stocks by criteria. For instance, you can find low market cap stocks trading at a low P/E. This is usually a good list to start combing through as a value investor.
5. Wall Street Journal – Most articles in the online edition are free. Alternatively, you can usually find this publication at Barnes and Nobles or Starbucks if you want to be real cheap. Warren Buffett used to read the Wall Street Journal for free at the local library.
6. CNBC – If you have cable, you’re likely got CNBC. I keep it on in my office on mute all day. Periodically, they’ll review a stock I’ve never heard of, so I check them out.
7. Local Papers – I read local paper’s business sections for the same reason I read BizJournal’s local journals.
8. The Highway – It is insane how many publicly traded companies have logos on vehicles and most people never notice. I keep mental notes of all the logos I see when I’m driving and look the companies up later.
9. Moody’s – This site allows you to drill down to region and industry for free. If you think for instance that long term health care facilities are going to do well in the future with the Baby Boomer generation aging, you can drill down and see DaVita HealthCare Partners’ has an announcement. Had you invested in them 5 years ago, you’d have made 270% gains.
10. Friends and Family – Just talking to people will give you ideas for businesses that can grow. Right now, I’m interested in drones. Talking with an insurance adjuster recently, I realized there would be tons of upside in the insurance industry for drones. As such, I’ve started looking into drone companies.
11. Google – Once you’ve got an idea or industry you think will grow, Google allows you to quickly research it for free.
12. Elance – For $20 you can have someone dig into all the expensive business databases to research the ideas or entities you’re interested in for a fraction of the price it would cost you to have subscriptions to all these databases.
This list is how I find most of my great investment ideas. Unless you’re a mutual fund manager, you don’t have time or money to waste trying to find great investing ideas. These 12 resources will cost you next to nothing and help you find great businesses trading at a discount in industries that are rapidly growing.
P.S. I’m creating a free resource guide that details how to make money with your great investment ideas. Enter your name and email address on the top right (Under my ebook) to get your free copy. Otherwise, you’ll have to pay for it later.