This will require you to pre-select companies that could offer the kind of growth potential you want for your investment. To avoid wasting any time, choose the companies you wish to research very carefully. The scuttlebutt method is accurate, yet time-consuming. Once you’ve developed a profile of the company, it’s time to contact company management directly to ask them informed questions. You’ll be amazed at what you find, as long as you ensure that you won’t make the information public or out your informant.Ĭontacting a few of the company’s competitors could also yield surprisingly accurate and detailed information. Instead, employ the scuttlebutt method: dig for information from every possible source.Ĭontact vendors, customers, former employees and research scientists or executives in trade associations. However, there is no guarantee that she’ll give you accurate information, because traders have to protect their own interests. Of course, you could easily track down a trader and ask her which companies she would recommend investing in. When considering a company’s investment potential, you’ll want to collect detailed information about the company from every possible angle. Successful investing is a lot like the work of a detective, as you need to research your topics thoroughly and analyze all available data to be effective. Don’t invest in a company whose employees are too busy squabbling to be productive, and whose executives can’t inspire solidarity or a shared vision in the workforce.
#Scuttlebutt method tv#
But management had the foresight to harness the company’s technical skills and experience to enter the two-way communication business, and continued to grow sales while other TV manufacturers’ sales flatlined.Ĭompanies with high growth potential also have a solid management team and good employee relations. Motorola, now known for mobile phones, used to produce televisions and radios. This meant that, until the color television was developed, TVs companies faced flat growth so they had to adapt. But by the middle of the decade, nearly everyone who wanted a black-and-white TV already had one.
The 1950s, for example, was a great time for television manufacturers. Companies with good growth potential also invest in research and development, to continue growing even when a current product line no longer offers opportunities for growth. Such companies offer products and services that ideally could sustain high sales volumes for at least a few years. Luckily, companies with growth potential can be recognized by their common characteristics. Smart investors look for companies with potential that are nonetheless still undervalued, as such companies can, when the time is right, grow with such rapidity that an investor can double or even triple his initial investment. Indeed, many stocks are either over- or undervalued, which can make investing difficult. It isn’t easy to identify which companies offer this kind of growth potential. Smart investors don’t seek quick profits but instead looks for companies with growth potential that over time will multiply an initial investment. Yet smart investing involves much more thought and planning, and is ideally focused on the long term. The common perception of investing is that it is fast-paced and brutal, with investors buying and selling seemingly on a whim, seeking quick profits above all.
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