- You have inside information. Not the bad kind … the on-the-ground kind.
- The info you’re exposed to in your 9-to-5 job can help you in investing.
- My neighbors also provide me with a wealth of info about their industries.
One of the greatest teachers I ever had was one of my professors in college: LaVerne Andreessen.
Andreessen taught accounting. As you know, society suggests all accountants are supposed to be quiet nerds.
And then there was Andreessen. He was unlike any accountant — and any teacher — I had ever met.
He wasn’t afraid to use his words … nor was he afraid to use them loudly. In a jovial way, though.
When he asked a question in class and no one raised their hand, he would tease us about what would happen if we presented a wrong answer.
“Maybe that should be your goal. Go through life without speaking. That way no one will ever know you’re there. That would be great.”
His sarcastic logic was spot-on.
Life is to be lived. And never, ever underestimate yourself.
I was reminded of Andreessen’s wit and wisdom at Banyan Hill’s recent Total Wealth Symposium in Amelia Island, Florida…
Nearly two weeks have passed since our annual conference, but the memories endure.
One that sticks with me is the quality of the conversation from the event.
Andreessen would have been proud.
After all, when you want to learn something, a great way to get answers is to ask someone.
I fielded questions from attendees … and I had a lot for them too.
After all, many of the attendees who are still working are in the trenches. They’re exposed to hands-on concepts in a variety of industries every day.
In fact, I wonder something about the conference attendees — and the folks who weren’t there too.
Do you recognize how much the information you’re exposed to in your 9-to-5 job can help you in investing?
If you sell products to other companies, you know which buyers you work with are most skilled at their jobs.
But what else do you know about them? About their organization?
Likely more than you realize. Try to take advantage of it.
Consider the brightest buyer you work with. It’s possible that she works with her firm because the company is adept at hiring quality people.
If so, that company could be full of solid professionals. If it is, it’s likely well run.
And we prefer to invest in well-run companies.
An Extension of the Example
Plus, you have inside information. Not the bad kind … the on-the-ground kind. The kind you develop when you work in the same company or industry for years.
If the buyer we mentioned above tells you her firm is doing a huge system upgrade this year, that may be a great tip.
Who is installing it? Is that company public?
Or, think about your own firm.
Think about all of the outside parties you work with. Do any of them talk about how busy they are? How they wonder if they’ll be able to keep up with demand?
If so, you may want to look into their stock.
You’re already familiar with their business (at least in part). Companies with employees who are always busy are often growing at a rapid clip.
Do you work with another outside party that’s in the same industry as the busy person? Or do you know someone else in the industry?
Connecting the Dots
I don’t know about you, but I’m surrounded by smart, experienced professionals in my neighborhood. They provide me with a wealth of information about their industries.
Are these people saying similar things about how busy they are? How there aren’t enough hours in the day to get everything done?
Or does it seem as though a single service provider is doing all or most of the installations at your and your peers’ firms?
If so, these are signs. And they may be a big deal.
They’re signs that you may want to learn more — ask questions or do some digging — about these apparently busy industries … and the stocks in them.
You have to connect the dots. And as you piece the story together, understand that no matter how much sleuthing you do, there will likely still be holes in the narrative.
If you have to choose one metric to focus on, choose sales growth. Companies whose top lines are growing fast tend to be growing in value too.
Investing analysis isn’t a perfect discipline.
But many of you already have the knowledge — or access to the knowledge — to get enough answers.
That knowledge is powerful. And it can be very lucrative.
You Have Access to a Wealth of Information
Let’s say you talk to your neighbor about his business. You have noticed — and he confirms — that he’s super busy. He’s on a plane Sunday night and Thursday night every week.
You ask him some questions, and he turns to you and says: “How do you know this?”
You say you read about a lot of investing-related topics and you’re asking questions that help you evaluate the investment potential of the company he works for.
Recognize you can take that conversation a step further.
You and your neighbor — and other like-minded people who you know — could meet for coffee once a month on a Saturday to talk about your ideas.
The more people you can include with different roles, the better.
Four engineers discussing a stock are more likely to engage in groupthink and come to the same answer.
But a group of four people who work in roles such as sales, engineering, finance and customer service see different aspects of their firms and industries. The conversation can be much more robust. Broader in scope.
Before you know it … you have an investment club. Or if that sounds too formal, you have a group of people to shoot the breeze with.
Either way, your discussions can make you richer.
So, please, never underestimate yourself. And never underestimate what you can contribute.
Professor Andreessen told me that early on.
Use your words. Live life. And don’t be surprised if good things happen to you.
Editor, Insider Profit Trader
P.S. The situations I provided in this essay were purposely vague.
They were meant to stimulate your thinking. To allow you to think of examples that fit the basic template I laid out.
I’m talking about examples that you have experienced, as well as those that you can follow up on today.
If you have an example of a situation where you have taken advantage of your industry knowledge or that of your peers to make money in the market, we’d love to hear about it.
Don’t worry, we won’t share anything you don’t want us to.
But we know that every day, our subscribers are exposed to investing information that they may not realize is actionable.
Please send your stories to firstname.lastname@example.org.