I don’t like stock screeners. My preferred method of finding breakout stock ideas is to screen everything manually by flipping through every stock that exist, starting with the A’s. Of course this is very hard, time consuming work, and I might not ever finish getting through every stock. But I like to have that mindset.
“Starting with the A’s”, as Warren Buffett talked about, is a great mindset that I have cloned, and I do spend a lot of time treasure hunting through every security I can find. But I also find stock ideas through other sources as well. Here are ten ways to find breakout stock ideas without using a screener.
1. Trade Journals
Trade journals are a great way to go in-depth with different industries and increase your edge in those industries. The trade journal I read the most is the Oil & Gas Investor. I’ve been reading this trade journal for the past couple of years and it has greatly increased my knowledge and feel for the oil and gas industry. Every month, I’m exposed to companies and managers that I would have never known about otherwise, and I find this to be a great way to learn about new companies and stocks.
2. Clone 13Fs
You can’t do much better than cloning the best Superinvestors. And we’re able to do that to a large extent because of their quarterly 13F requirements. I like to use WhaleWisdom to track 13Fs. Pick out your Mount Rushmore of Superinvestors that you most closely identify with, in terms of investing style and temperament, look at what they buy and sell, and do similar things at similar prices. Cloning is the easiest, and probably best way to find breakout stock ideas.
Speaking of cloning, check out OpenInsider. This website takes the Form 4 SEC filings and presents the data in a way that’s easy to look at and scan through. I like buying stocks when I know that management or board members are buying in at the same price and are positive on their company’s future. OpenInsider is how I’ve found some of my best stock ideas.
Does anyone read anymore? I do. I read the New York Times, the Wall Street Journal, and the Financial Times every day. Mostly this is just for enjoyment, but I also learn a lot all the time and every now and then I find a stock idea. Maybe it’s a profile of an executive, or it could be news about a company that leads me to one of their competitors. Reading newspapers daily is definitely a way that I find out about new stock ideas.
5. The Economist and Barron’s
In addition to the newspapers, I also read The Economist and Barron’s each week. Charlie Munger found one stock idea from Barron’s after decades of reading it, made a multi-bagger on that stock, gave the money to Li Lu, and by the time Li Lu had been compounding it for years, that one stock idea was eventually parlayed into a 100 to 1 return. And The Economist is great too, it’s how I found out about Seth Klarman.
6. Value Line
Warren Buffett, Charlie Munger, and Li Lu have all said that they read Value Line and find it very important and useful. What else do you need to know?
7. Your Eyes
What you see on a daily basis can lead to great stock ideas. Where are your friends going to lunch over and over? Where does your wife buy all her clothes at? What’s that growing company downtown that just expanded to a second building? Open your eyes! Wonderful stock ideas are all around us all the time. Go through life curious, be interested in what you see around you, and the stock ideas will start flowing in.
8. Your Credit Card Statement
Is there a stock idea right there on your credit card statement? There might be. Great businesses win your money over and over. What do you spend money on month after month? Check out your credit card statement. It might lead to a stock idea that that ends up paying for all of your credit card statements for decades to come.
YouTube has turned into a great resource for value investors. I list my favorite investment YouTube channels on my resources page. Hedge fund managers pay top salaries to their stock analysts, but After Dinner Investor’s analysts all work for free. Every day they’re showing up in my feed with videos on new companies that they’re looking into. YouTube can be Value Investor Heaven if you use it the right way and find the right people.
10. Old TV Shows and Movies
Besides the laughs and entertainment, old television shows and movies can be a great way to find stock ideas. What businesses or products do you see in those shows and movies? Which companies still exist? Great businesses are able to last through long time periods. If a business that you see on an old tv show or movie is still around, it might be worth looking into.
So there you have it. Those are your ten ways to find breakout, multi-bagger stock ideas without using a stock screener. And remember, when we’re going through stock ideas, our job is to reject stock ideas as quickly as possible.