There can be no greater joy for the sporting stock investor. All cash is not the same. Gains from small-capital stocks that graduate to the big league are special. Making money from blue chips is just not the same in terms of sheer thrill.
There is no single way to hunt for game. That is why our stock market journey in search of the best stocks of tomorrow needs a whole series during the course of a 10-week expedition. We cast anchor last week. Today, it is time to put on investment binoculars.
Long focal length can only work if we reduce the range of vision. Use the Pond Theory at this point. This concept asks you to choose the size of game stock you seek. Do you have the resources to go after sunshine stocks that will become global mega-corporations of the future? Or are you the modest type that will be satisfied with niche dominance in your neighborhood? Theory says that it is better to be a small fish in a big pond. This means that you should be content to own stocks in an ancillary for the Aerospace & Defense Industry, or something else of that size. However, this may not be everyone’s cup of tea.
Stock investing feeds the ego. A time comes when dividends and price appreciation are not enough. You want to be part of a leadership brand. Stocks of the best catfish farming company may suit you just right. Naturally, we want everything. However, the stock market ground reality is that even Warren Buffet has to live with trade-offs. That is why choosing your stock prey matters so much for success in the growth game.
Next, we need the right bait. Even baby sharks will not bother with small fry. Goldfish will not go beyond plankton. We need Marketing Metrics to lure stock with high growth probabilities, and of the country/sector/industry type. Look for part 3 of this series next week.
Let us hear your thoughts below: