Lots of women ask me how and where I find good stocks. They might be expecting me to tell them to check out the latest issue of Barron’s or Investors Business Daily. And that’s fine as a way to keep up with market trends. But I point out that good stocks might be as close as their own medicine cabinet, clothes closet or garage. And I ask them to join me on a stock shopping trip that begins when they wake up in the morning.
Did they sleep well on their Temper-pedic mattress? What brand of toothpaste do they like? How about cereal? What company makes their favorite outfits for the office or the gym? What car do they drive to work? Perhaps they’ll make a stop at the mall to see which stores are most crowded. (It might be the Apple store rather than Abercrombie & Fitch!) Or maybe their friends are buying everything over the Internet. At the office, what are the latest products their employers are buying to improve efficiency or upgrade productivity? Are they sitting on ergonomic chairs made by a certain company?
Nearly everything we see and do, from morning until night, can become part of our stock window-shopping trips. The best performing stocks of the past decade have not been some hotshot tech stocks, but Chico’s, the clothing chain for women of a certain age and size, and Hansen Natural, the makers of those energy drinks that everyone seemed to be drinking all of a sudden.
I have a friend who bought stock in Chico’s after her first trip to a newly opened store, where she was finally able to buy something that didn’t make her look like a teen hooker wannabe. She sold that stock a few years later and was able to buy land for her dreamhouse on a nearby lake. She still calls that land her Chico’s lot. Had you bought Hansen stock at its lowest point, you would have gotten more than a 26,000 percent return on your money! And you would have done nearly as well with Nutrisystems, the diet company.
So here are a few pointers. When we shop for stocks, we’re looking for bargains, whether it’s marked-down familiar brand names, “hot” new names or undiscovered stars-in-the-making. But we’re also looking for quality – the best bang for the buck. We want growing, well-run companies that have an edge over any potential competitors. I want to fill my portfolio, as we would our shopping carts, shelves or closets, with a mixture of high-quality, long- term items, along with a smattering of useful shorter-term seasonal items that may not have such a long shelf life – as well as a few inexpensive items that may well become classics.
Some stocks are “value” stocks. That is, they’ve been beaten down, for various reasons. These are the wallflowers, the unloved stocks, which may need a makeover. Others are “growth” stocks, which we buy at more of a premium because earnings are growing. The best of all worlds is to discover a new name or product before it becomes a household word. And here’s where our ability to sniff out trends and bargains comes into play. We can call on our Women’s Early Warning System to help us.
Sometimes I find my star stocks in unlikely places, such as an oil refinery. One of my best stocks over the past few years was Valero, the oil refiner, which I first learned about from an acquaintance who told me how much she enjoyed working there and how much everyone loved the company’s CEO. Not only did she find that this company in a male-dominated field treated its women employees well; she was rapidly promoted as she proved her mettle. During the terrible time of Hurricanes Rita and Katrina, which damaged some of the company’s plants and endangered the lives and livelihood of its employees, the company came through, providing food and shelter for them all and keeping them on the payroll. So it was an added pleasure when the stock doubled, then tripled.
So keep your ears and eyes open. You never know when you’ll find a great stock right around the corner! You can check out some how-to shopping tips and trends on my Web site Woman with Portfolio.
