A Recap of Stock
Ideas
The first question you should ask yourself before you invest
in anything is…what can I lose (risk)? Only after that has been addressed
should you consider what you can make (potential reward).
Four of the five stock ideas I came up with were derived
from my stock scan of the Canadian market on July 8th. I scanned the
Canadian market for both value and quality. I also wanted some growth as it is
difficult to create value over time without growth, so I looked at the stock’s
3 year revenue growth rate after the scan was complete. By insisting on
focusing on value I hopefully built a certain margin of safety into my
investing process. It’s a good habit to get into.
I think I came up with some interesting investment ideas…a
manufacturer and supplier of wire products, an exploration and development
drilling company serving the mining industry, a supplier
of components to the aerospace industry and an oil and gas services company.
Gigamon stands apart from the rest of my stock ideas as it
is an emerging growth story from the US market. A different type of
company both in its life cycle and the nature of business it is in. I got that
investment idea from a different source. As it is an emerging growth company
there will be more risk but potentially more reward as well if one was to
invest in it. Investing in the stocks of public companies can be a varied menu.
This was a helpful exercise for me. In sifting through and
selecting the stocks of my scan I decided to write my thoughts down in
permanent form. There is something about writing your thoughts and
investigations down on paper (cyberspace). They take on a tangible form and
materialize in your physical world. It is something you can refer back to,
instead of losing your thoughts to the vagaries of time and memory.
I'll check back in on these stocks from time to time to see
how they are faring. I currently own one of them, High Arctic Energy Services,
which I bought in March of 2016.
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