OK, so that headline sounds pretty odd for those of you (which is most of you, actually) who don’t also participate over at the Stock Gumshoe Forum.
I offered a prize for the best posting on the forum last week, as I’ve done a few times over the last six months or so, and this time around it was intrepid participant 10bagger who won the prize ($100 cash).
The prize is on its merry way to him, but I wanted to share this information with everyone because I think we can learn a lot from what 10bagger did in his post that won him the appreciation of his fellow forum participants (they chose the prizewinner, not me):
He actually did some research.
Really — the real stuff, not just reading published materials. He actually sent company management an email with some specific questions, and got answers that he shared with everyone.
So, I have no idea if the company he was researching is any good (Grand Portage, FYI, I’ve never heard of them and have no opinion about the company). And I don’t want to overemphasize what he did — he didn’t invent email, of course, or diligence.
But he did make much more of an effort to learn about his company than I see many people making. His prize-winning post is here, if you want to check it out, and it’s part of a long series of writeups he did about this little company that he proposed as a “20 bagger” months ago. He has since backed off of the idea of really pushing his own stock ideas, since he has noticed that this is an emotionally charged thing to do if your idea happens to not perform as expected, but I hope he’ll continue to participate and throw out interesting ideas to the rest of us, and share the results of his due diligence efforts.
I know that many of us are sometimes tempted by microcap and other small, risky investments that are outside our area of expertise (in my case, I’d single out mining stocks), and, especially when we go into these uncharted waters, it can’t hurt to be as informed as possible.
And as 10bagger’s experience illustrates, you can often get to the CEOs or other higher-ups of these tiny companies via phone or email and get their answers to your questions (whether or not they answer well or honestly, that I can’t tell you).
So … one more ‘ol fashioned way to learn more about a company — ask them some questions. Crazy, huh?
Thanks to 10bagger, and to the other very active participants on the forum who help sleuth out teaser ads, recommend stock ideas to each other, or provide opinions about the various newsletters and services they subscribe to (and womanwithportfolio — who has her own really interesting website, too — was a very close second, by the way).
And actually — a bit of an update here — I’m embarrassed to say that I just went back and double-checked, on prodding from some readers — and I realized that it should have been a tie. Sorry to womanwithportfolio, who will now also win a prize. Her excellent post that was selected by forum participants is here, if you want to check that out — she sniffs out the five teaser companies from an ad touting China’s huge upcoming investments in pollution control and similar technologies.
I know there are lots of folks out there who hate discussion forums and message boards, but I think even many of you in that camp might appreciate the one we’ve got going here at the Gumshoe — no personal attacks, no spam, lots of helpful posters, and, every now and then, some great ideas. (If you do decide to participate, which is free and can be anonymous, please help us keep it clean, friendly, and helpful).
Happy investing, everyone.
Personal Capital is an advertiser with Stock Gumshoe, but Travis also uses it every day for his personal accounts and finds it invaluable. Here's what he said: "They offer a great (and genuinely FREE) 'second opinion' for your financial plan, but what I love most is their automated financial dashboard -- it will look at all your assets and debts, tally up your asset allocation, project where you'll be at retirement, and suggest ways to manage risk or improve returns. It's free, I think their free tools are great, and I think it's worth checking out -- you can do so here.