Smart investors find clues for making profitable investments in all sorts of places.
You do not just find good investments by reading the financial pages or watching the business channels. You can uncover investments at work, when shopping, on vacation, or in even stranger places.
Many companies use “best of breed” technology in their business operations. In early 1996, I did some work for a systems company. The company used routers for their clients made by a relatively new company, named Cisco. They chose Cisco because they thought Cisco was the best in that field. If Cisco was the best, perhaps they would be a good investment. At the time, one could buy shares in Cisco for under $4 per share. At its peak in March of 2000, Cisco traded at $77 per share. Even after the bubble burst, Cisco still trades today at $24. Not a bad return.
The same might hold true for customers, suppliers, or partners of companies you work with.
But keep in mind that just because a company is “good”, that does not necessarily mean that it is a good investment. There are many factors that determine the investment worthiness of a company. And sometimes an out of favour company can be a great investment.
Think about investing when shopping, on vacation, and so on.
What brands do you buy? Why? Is it because the product is well made, trendy, or a great value? If you are buying it, perhaps many others are as well and that translates into revenues for the company. And that may indicate a potential investment opportunity.
When travelling you might see products or companies that do not operate where you live. Is there an opportunity to set up a similar business in your community? Or maybe you could start a franchise or partner with the foreign company? Always be thinking when travelling. You might just be bringing the next McDonalds or Starbucks to your city.
So if you want to be an investor, always be on the lookout for investment opportunities. Especially those in the non-traditional places.
