I’ve spend a lot of time thinking about investing lately. My goal is to really develop a process for identifying good investments and then drilling down into a good analysis of each company. This reboot may help readers think about how they might begin investing if they are just getting started.
The first step in the process is to identify companies that are interesting to me. If they are not interesting, it will feel too much like work keeping track of them. I don’t want this to be work. That said, I probably have a higher tolerance for research than others. I actually find it enjoyable. I can also identify companies where I have better than average knowledge or expertise of the industry. These companies fall within my “circle of competence.”
So here goes. I am starting with a list of companies. This is a list of companies that I encounter on a regular basis or that I admire.
- Amazon.com – Boxes regularly arrive on my front porch.
- Starbucks – Always a nice treat to get Starbucks.
- Panera – Regular lunch for me and the occasional breakfast as well.
- Garmin – I really like my Garmin running watch.
- Nike – Wearing Nike shoes as I write this.
- Under Armour – All the kids seem to wear Under Armour and I’ve long admired their growth.
- Netflix – Still a regular subscriber.
- Costco – Another regular stop for our family. Always seems to be packed.
- Skechers – My kids love their shoes and insist on getting only Skechers.
- Apple – Multiple Apple devices in our home.
- Disney – They own Lucasfilm, Pixar, ABC, ESPN, and many other properties that we often interact with.
- Whole Foods – Usually a weekly trip to Whole Foods for our family as well.
- Tesla – Waiting for my model 3 to be finished.
- Berkshire Hathaway – Run by the world’s greatest investor.
- Sam Adams – Good beer.
- Wolverine World Wide – They own Merrill, and I love my Merrill hiking boots and my Merrill barefoot running shoes.
- Marriott – Preferred place to stay on a business trip.
- Microsoft – Owner of Office and Windows. Still in contact with this company regularly.
- TD Ameritrade – My preferred online broker.
- Chipotle – Yummy burritos. I realize they are still trying to recover from food safety issues and a management scandal.
- AMC Networks – Great content in a crowded space. Are they in need of a new hit?
- Lexington Realty Trust – I’ve made a lot of money from figuring out how this REIT works.
- Other REITs – Maybe when REITs once again fall out of favor (Simon, Vornado, Omega Healthcare, etc.)
- Southwest Airlines – One of the few that care about their customers.
- ADP – They process checks and are a really well-run company.
- Procter and Gamble – Plenty of their consumer staples in my household.
- Alphabet – Parent company of Google, and I’m always using Google.
- MMM – 3M is a company that I’ve long admired for their way of driving innovation across different product types.
- Markel – Great specialty insurer with a great investor in charge of their excess cash.
- Visa – Great toll operator for the financial services industry.
- Mastercard – Same.
So that’s a quick list off the top of my head. I would encourage everyone to make a similar list. Focus on what you encounter and what you know. This list may grow over time as I think of new companies that I know. Next, I’m going to do some brief digging to see where I should focus my time first.