The Gutman Group

Dear reader, we hope you are enjoying mooching off of all our hard work, because we are certainly not having much fun providing it to you. If you like the content on this site then to subscribe to our RSS feed and follow us on Twitter...or risk being poor forever. Consider it like insurance or something...

So, you say you are ready to invest. You know how the stock market works, you’re ready to build your own portfolio, you’ve read up all about the importance or reading and analyzing income statements and you’ve even chosen an online stock brokerage… there’s just one problem:

You can’t find any stocks!

It’s okay, it happens to the best of us. Thankfully martyrs like the great Mr. Moneybags exist who will lead you to financial bliss all the while referring to themselves in the third person.

Of course, there is a rather large difference between simply finding stocks and finding good stocks, you know, the kind that will make you enough money to afford a baseball diamond…made out of real diamonds. Doing that requires a bit more cunning, but one step at a time!

This article will list the tried-and-true methods of finding stocks (stocks such as the ones that made me all those big fat moneybags as shown in The BAG Fund) and how you can use them to your advantage.

1. Welcome to the Real World

Believe it or not, finding stocks doesn’t mean you have to be hunched in front of seventeen computer screens, flipping through mountains of annual reports while twisting your moustache, twirling your cane, peeling a banana and reciting the literary works of Hemingway.

In fact, some of the best stock ideas I ever got were from real life experiences and it is actually the greatest place for new investors to find their next great stocks. As I mentioned in my free eBook, you are a part of the stock market.

Every time you buy something, say an iPod, you are making money for a corporation, such as Apple. Whenever you buy a box of Kleenex to wipe off whatever filth comes out of your body, you are making the Kimberly-Clark Corporation just a tad richer. Whenever you steal the transmission out of a Corolla, you are making money for Toyota (since the owner has to get the engine replaced, courtesy of Toyota). You get the point.

So, take a look at all the crap around your apartment/house/bungalow/shack and see what you have a lot of. Look at all the stuff you like and see if your friends like it as well. Listen to all the things you constantly hear people talking about. Think about the stores you visit every day and the services that you can’t live without and even the clothes you wear.

You might find that you have a lot of stuff from Wal-Mart lying around, that you and your friends can’t live without their iPods (made by Apple), you overhear people arguing which flavour of the Monster energy drink is better (produced by Hansen Natural), that you visit Best Buy religiously, that you do all your online shopping on Amazon and that all your clothes are from American Eagle.

Just by taking a ridiculously quick look at your everyday life, we got six stock ideas. Now imagine if you sat down and analyzed your life a bit further, think of all the companies that you encounter every single day of your life – you can easily list hundreds.

And how do you know if these are companies who have stocks that you can invest in?

Simple head over to Yahoo! Finance and start typing the name of your company in the search box next to the “Get Quotes” button. As you can see (unless you are blind, in which case I have little-to-no idea how you even got this far in the article), I started typing “Apple” and already got a whole list of companies after just two letters.

If you can’t find the company you are looking for then it is most likely not publically traded and you can’t invest into it…if you can’t live with such a crushing disappointment, I sell cheap length of rope for cheap prices.

2. The Interwebs

If you don’t already know, there is this new contraption known as the internet where greedy corporations and internet start-ups use as a venue to make big fat moneybags while other morons blabber about their feelings (i.e. blogging). If we put both pieces of the puzzle together, I (the blabbering moron) will lead you to some place of use (a greedy internet start-up) in order to show you how to make big fat moneybags. It is a rather simple equation, really: Mr. Moneybags + Anything = Big Fat Moneybags.

I have a whole giant list of financial websites which I like to peruse in my leisure, picking any stocks that tickly my fancy. My favourite site above all is known as www.Finviz.com.

The cool thing about Finviz is that it is all about stocks – nothing else. As soon as you open up their home page you are slapped with a whole page full of numbers and charts, but do not worry, it only looks intimidating.

At the top of the screen you have the three major indices (the DOW, NASDAQ and S&P 500) and their daily performance, but I don’t really care about that. The goldmine is what is underneath it, the two columns showing stock tickers along with their daily performance.

On the left we have the “Top Gainers” of the day and on the right the “Top Losers”.

Most people will immediately look at the top gainers of the day and will tell you to invest your money into them above all, since you know, green is good. To these people I say: there is a reason you are poor.

True, sometimes when a stock jumps almost 80% in one day it will be justified, but most of the time it is as a result of idiot investors letting their emotions get the best of them; creating a herd mentality where one idiot invests into a stupid stock on stupid news and the rest of the lemmings follow after, driving the price of a stock up – this is referred to as “Overbought”. When a stock is overbought (and it happens a lot), its price per share will plummet soon after, a lot like a certain appendage of yours soon after seeing Renee Zellweger hobble in to view.

Using the same logic, that means that irrational investors will drive down the stock price of perfectly decent stocks to extreme levels on rather insignificant news – referred to as “Oversold”. When this happens, the price of the stock will rebound shortly after, kind of like a certain appendage of yours soon after seeing Megan Fox complete with booty-shorts kick Renee Zellweger off-screen.

Deciding what news is significant and which is not is for you to decide (or for me to show you through future articles), but this information is definitely good to know. Think about it, would you rather pay for something many times what it is worth or buy it on sale? Same story with stocks.

Finviz also has the best stock screener I’ve ever seen, where you can input certain criteria that you want associated with your stock (such as a lot of cash, no debt and to be a small company) and it will generate a handy list of stocks that match the inputted criteria. Although, if you are new to the world of stocks you might have little-to-no idea as to what is going on and instead of doing something productive may just invoke your hidden suicidal tendencies. At times like this I will either recommend you buy some of my length of rope or to continue reading my wise teachings, your choice.

3. Follow the Pros

If you’ve been following any of my deceptively informative yet whimsical teachings, you will know of my deep disdain for the “professionals”. You know, the guys that consider making an 8% annual rate of return to be something worthy of praise. Yes, those guys.

Of course, there are some professionals that are indeed worthy of praise (such as myself, the mighty Mr. Moneybags) and that old guy (Warren Buffett), the other old guy (George Soros), that other old guy (Jim Rogers) among others.

Thankfully for you, I show my portfolio for the world to see so you can always head over there for some stock ideas. If that doesn’t tickle your fancy to its full extent, www.gurufocus.com shows you the holdings of many famous and even more not-so famous investors.

4. Talk to others

You can always find people that know what they are talking about and bounce stock tips off of each other. If you are one of those people who dares not leave his/her Fortress of Solitude, there are millions of financial blogs (such as this one, although we are better than everyone else – no contest) and forums where you can talk to people and automated machines.

Or you can stroll the streets and pull random people towards you and beg them for some stock tips. If you do this enough, sooner than later you should find someone that doesn’t call the cops and eventually you might even get a good tip or two.

In Closing

These are four tried-and-true methods of finding good stocks. My favourite means of finding stocks is using Finviz’s stock screener as I have a longer list of criteria for my stocks than people would line up to see Tom Cruise be savagely beaten with sacks of potatoes and only Finviz’s screener is this anal.

Although, the greatest stocks I found were ones that I found from real life experiences. The tips that I typically get from others or professionals tend to be as useful as a lesson on intellectuality from Sarah Palin.

If you find your stocks through other means don’t hesitate to share the wealth…or else.

Some random posts you might enjoy: