Using a service often does not always translate into that service generating spectacular, analyst beating results.
Looking at businesses that you are familiar with is a good starting point, but is -no substitute- for analyzing the numbers generated by the business. It's better for scuttlebutting, that is, visiting the stores and seeing how customer levels fluctuate. Are there more people visiting the Apple Store this year than last? That kind of thing.
A good case in point - I visited a hamburger chain, tasted the food and hated it. I thought the food was mediocre and the prices were too high. But, I decided to keep the stock anyway. Why? They had a new 32 year old investor who fought his way onto the board of directors, fired members of the old management team, made himself CEO, and cut expenditures to the bone. The result? They company steered clear of bankruptcy, became debt free, generated a 10% free cash flow yield, and has so far generated me an 80% return.
The thing is - had I just visited the restaurant, I probably wouldn't have noticed this. Red dots being removed from styrofoam cups (cost cutting), a picture of the new CEO in the restaurant (change in management), and sliced rather than cherry tomatoes in the salad (cost cutting) may have been indication of some change; but not enough to tell me about the big behind the scenes changes without the company's financials.
Actually, it's paying attention to the choices you make (for example, continuing to buy Macs over PCs) in domains that you are knowledgeable.
I actually know a great deal about trading, having done it professionally for a while. I only occasionally trade stocks now; I prefer angel investing...
Looking at businesses that you are familiar with is a good starting point, but is -no substitute- for analyzing the numbers generated by the business. It's better for scuttlebutting, that is, visiting the stores and seeing how customer levels fluctuate. Are there more people visiting the Apple Store this year than last? That kind of thing.
A good case in point - I visited a hamburger chain, tasted the food and hated it. I thought the food was mediocre and the prices were too high. But, I decided to keep the stock anyway. Why? They had a new 32 year old investor who fought his way onto the board of directors, fired members of the old management team, made himself CEO, and cut expenditures to the bone. The result? They company steered clear of bankruptcy, became debt free, generated a 10% free cash flow yield, and has so far generated me an 80% return.
The thing is - had I just visited the restaurant, I probably wouldn't have noticed this. Red dots being removed from styrofoam cups (cost cutting), a picture of the new CEO in the restaurant (change in management), and sliced rather than cherry tomatoes in the salad (cost cutting) may have been indication of some change; but not enough to tell me about the big behind the scenes changes without the company's financials.