How To Find A New Idea

As we explained in TIME ALLOCATION searching for potential new is one of the most critical activities of a value investor.  Below is a ranked list of the best places to find new investment ideas.  We would certainly not eliminate the sources at the bottom of the list.  We would concentrate on the sources at the top.

  1. Keep some type of organized list of companies you have done some preliminary work on.  Often you will find companies that have many interesting aspects, but their stock price is still too high to warrant further consideration.  However, in our increasingly volatile market these ideas will sometimes go on sale.  Volatility is the value investor’s best friend.  I keep a list as a portfolio on Seeking Alpha.
  2. Each week glance at new set stocks.  We do this by glancing through each new issue of the Value Line Investment Survey. We have been doing this since the beginning of our careers.  Always remember the key principle, LOOK AT LOTS OF COMPANIES.
  3. Do the same computer screen every week, or at least every month.  We will add a teaching piece called SCREENING TECHNIQUES.
  4. Examine the holding and new purchases of some of your favorite investors. The site Guru Focus.dom is a great source. As is the site           to examine mutual fund portfolios.  Please see USING THE IDEAS OF GURUS.
  5. Talk with friends that understand your investment style about new ideas.  This is a solid source of new ideas but not as good as the first four.
  6. Select an industry that seems to be out of favor with other investors and try to find the best idea in that industry. See ANALYZING AN INDUSTRY.
  7. Use aggregator site like Seeking Alpha to read interesting headlines.
  8. Other sites.
  9. Old media sources Barron’s, Forbes.
  10. Stock brokers.

Many of the ideas that you get from all of these sources should be added to the list discussed in item #1.  Try as hard as you can to stay organized.

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About Gregg Jahnke