Many years ago, for a school project, the author looked through a couple years of back history of a small town newspaper. The great thing about it was to see the events happening on an annual basis, and gain an understanding of what goes on in the town. It was with that perspective Ken Fisher’s book The Making of a Market Guru, John Wiley & Sons, 2009 was read. Ken Fisher has been writing a column in Forbes magazine as well as investing money for his firm and both are still thriving. Over the years he has given a wealth of knowledge, and hopefully you if you do not read him, you will put him on your reading list. This particular book focuses on the years from 1984 to 2009, which is and was an exciting time to be focused on Wall Street.

Originally Mr. Fisher focused on smaller growth companies because they have advantages that larger companies find it hard to do. Regional companies can do all the things a large company can do, but being under the radar of the national brand companies, the regional company can monopolized the regional market. In every region, the locals are cheering for the local companies, even though they often use the national companies. By looking at regional markets leaders, the price of the shares are sometimes undervalued because they are not in the correct big cities. The trick is always to look for good companies without overpaying, over-trading or getting over your head. The tried and true method is before deciding to invest ask questions? Many of the answers are on line, but you can call the company and often they will tell you answers. The questions include what exactly does your product do for your customers? why do they buy yours instead of your competition? what is your market share? who are the leading competitors? how important is pricing to your customers? service? product features?  When you gain the answers you will have a good idea of the strengths and weakness of the company.

Linking to dividend producing stocks, Mr. Fisher focused on growth stocks that are undervalued, but well managed and have competitive advantages, if you focus on dividend companies, the answers to the above questions will help to tell you how safe the dividend is. In dividend companies, the idea is to hold them for a number of years all the while receiving a dividend and over time the shares will go up and down, but more up than down because of the quality reasons you bought it for.

There are more questions than answers, till the next time – to raising questions