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Using What You See To Get Rich



October 13, 2010 – Comments (5) | RELATED TICKERS: MCD , CAT , SBUX

Ok guys.  I think we all know what is going on.  Instead of looking at the market and trying to pinpoint individual stocks you think are going to get big next month or sometime in the near future, look at the big picture.  What is happening in the world?  If you just would watch the news, go outside, and be alert of your surroundings, you can go pretty far when it comes to investing.  What am I talking about?  Well read what I see in my daily life and see how I can use this knowledge to make reasonable and pretty accurate investing decisions despite what is happening politically, despite all the rumors on CNBC, despite some 'hunch' you heard of.


I see nothing but obesity everywhere.  I go in the morning line at work in the cafeteria and I see everyone buying coffee.  I can go to any fast food place and see people in drive thrus.  They are mostly buying coffee too.  McDonald's is everywhere and from morning to night the drive thru and parking lots of full.  It doesn't matter what kind of coffee place it is either.  They are all busy all day every day.  So what does this mean?  That means stocks like MCD are strong buys.  People obviously don't care about their health.  Obesity continues to rise.  Kids are the next generation of MCD fans.  Buy MCD.


It means also that any coffee startup company has a good shot at becoming big.  Maybe not Starbucks big, but definitely not going out of business anytime soon.  On my way to the gym, there are small coffee startups being built.  One building that is small is almost finished.  It is going across the street and next to places like Dunkin Donuts and MCD, which both sell coffee as well.  And that line at work that is backed up with coffee drinkers?  That line is only getting longer.  Coffee is so great because it makes people addicted, it is part of culture in America, and people actually feel a need to drink it.  On top of that, coffee is extremely cheap to the sellers and SEEMS cheap to the buyers.  For $1.50 +/- a buck or two, coffee has great margins.  Get a good distibutor and it is no wonder why smaller coffee companies have stocks that are blowing through the roof.  GMCR, CBOU, PEET, and SBUX are solid buys - although SBUX has less upside.  Oh and let's not forget the great DDRX (Diedrich Coffee) which went up from pennies to $35/share (over 4000% gains) when it was bought by GMCR May of 2010. 


On my drive to work, all I see is construction.  More and more construction.  Instead of complaining about it, why not be happy about it by investing in construction stocks.  A company like CAT wouldn't be so bad to start.  It has gone from about $50/share to $80/share+ in a single year.  Along with a dividend yield of over 2% annually, CAT isn't so bad.


As I keep driving, I get annoyed by all the people on cell phones.  People talking on the phone.  What else is new?  How about I get even happier and invest in telecommunications.  You can't really go wrong with VZ, T, or even S - if you think Sprint can rise back to where it once was.  Oh and with so many people going to the iPhone, AAPL might not be such a bad idea either - although I think the stock is somewhat high to get in right now.  But then again it could hit $400/share just as easily.


After work, I sometimes hit up the mall.  At the mall, I won't go into specifics but you have clothing stores, retail stores, etc.  Many of these are publically traded.  Maybe set your stock purchases around holidays and those long lines that used to annoy you might just be a little easier when your bank account rises. 


On the weekend, if you go out at night to the bar/club, you see everyone still doing what?  Smoking and drinking!!! Invest in some MO and that second hand smoke suddenly becomes tolerable - especially with that 6%+ juicy dividend (no Jim Cramer lol).  Find a solid beer company and you are set there too.


This continues everywhere throughout your daily life.  Look at what cars are popular on the road, find out what department stores are doing well.  Chances are that if you see a place not doing well or a place you don't go to anymore, most likely many others aren't either.

Basically leave the financial data sheets aside and invest in what you see.  You might be surprised at how obvious some investments really are.


5 Comments – Post Your Own

#1) On October 13, 2010 at 2:40 PM, raambo (< 20) wrote:

Love this article. An added bonus of doing this is that you also then invest in companies that you understand, IE Sbux obviously makes coffee etc.

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#2) On October 13, 2010 at 3:42 PM, mikecart1 (78.14) wrote:


Exactly.  My entire portfolio is of companies I actually understand or have a way of contacting and finding out (nearby companies for example).  This prevents me from find the lottery stocks and unknowns that shoot up 1000% a year but it also prevents me from investing in shady companies I am not familiar with.  I used to live near US Steel HQ so I knew about the company pretty well.  It was within walking distance.  So I got a bunch of X when it dropped to $18/share.  I expect them to do well because from what I see, they are rising to the top again. 

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#3) On October 13, 2010 at 3:50 PM, miteycasey (29.01) wrote:

Peter Lynch made billions doing this.

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#4) On October 13, 2010 at 4:11 PM, mikecart1 (78.14) wrote:


I shall be Peter Lynch then! :D

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#5) On October 15, 2010 at 1:53 PM, Mascalzzone (< 20) wrote:

Great philosophy. Ad to this also yin yang philosophy and You are a winner. By that i mean that for every looser, therer must be a winner too. If You witness some bubble burst, don't worry, think about it like a new opportunity, becouse something/someone will profit from that and You make sure You find who that is.

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