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So You Want to be a Stock Picker

Everyone seems to be asking the same thing all the time.  "How do you decide which stocks to invest in."  Well, there are a lot of ways to determine what stocks you want to own and there are just as many metrics to lead you to the promised land of "alpha."

I've always liked the actor, Peter Falk.  What intrigued me about him the most is his role as the detective, Columbo.  I loved that show and I loved Detective Columbo.  He was always asking questions.  He'd never seem to run out of questions and often would be going out the door and while the bad guy was looking kind of smugly at Columbo and snickering, old Columbo would turn around, pause, and then say, "I just have one more question......"

Whenever I go someplace, I always strike up a conversation with people.  Mostly I'm asking questions.  How long have you worked here?  What did you do before?  How does this job compare?  What do you like about this job?  What's the company culture like?  Are you coming out with any new products?  New advertising campaigns?  Would you recommend my son coming to work for this company?  Why?  Why not?  What's your best selling item?  What kind of profit margins do you work on?  Does the company have plans for expansion?  The list is endless.

Then go home and crack the numbers.  If everything matches up, take a position.  You might even ask one final question--"would you buy stock in this company?"  Why?  Why not?

You'd be surprised what you can find out if you just ask questions.

Just Sayin