I’m always hunting for share ideas that could boost my wealth and lead to a very comfortable retirement.
One easy way to find share ideas is to simply think about the companies whose products or services you’ve used yourself.
In his book One Up On Wall Street, legendary US fund manager Peter Lynch claimed:
“I talk to hundreds of companies a year and spend hour after hour in heady powwows with CEOs, financial analysts and my colleagues in the mutual fund business, but I stumble onto the big winners in extracurricular situations, the same way you could.“
“Taco Bell, I was impressed with the burrito on a trip to California…; Volvo, my family and friends drive this car; Apple Computer, my kids had one at home and then the systems manager bought several for the office; Dunkin’ Donuts, I loved the coffee…“
Mr Lynch averaged something like 29% annual returns during the 1980s, which suggests this simple ‘buy what you know’ approach can actually work.
So here are three different companies — one large, one medium and one small — I’ve come into contact recently through my ‘extracurricular situations’ that might one day join my own portfolio.
It was a surprisingly Nice flight for the money
I’d never flown on a budget airline until the other week.
I don’t like flying at the best of times, and the thought of queuing up and scrambling onto a plane to bag some decent seats has always been the stuff of nightmares.
But the fact easyJet (LSE: EZJ) now offers allocated seating prompted me to have second thoughts. And when I discovered the firm’s cheap tickets and very user-friendly website…
…I took the chance and booked return flights from Gatwick to Nice. And I have to admit, the experience — given the cost — was surprisingly not that bad.
Even my wife — who hates airports and flying more than me — admitted she would fly with easyJet again at the same low cost. Praise indeed.
So now I quite understand why easyJet carried 8% more passengers last month versus the same time last year. It’s a share for my watch list.
I hand over my money every year without much thought
On to more mundane things now… home insurance.
When I moved house three years ago, I shopped around for buildings cover and ended up with a policy from esure (LSE: ESUR).
Since then — and despite being bombarded with TV adverts from all the comparison websites — I’ve never shopped around since.
That’s partly due to my inertia.
But it’s also due to the renewal quotes I receive. They’ve either stayed the same or gone down, which keeps me on board.
Who knows, if I ever do shop around I might find a much better quote elsewhere. But until that day, I shall be renewing with esure without giving it a second thought.
Come to think of it, this surely has to be a good line of business — where customers hand over money every year without much hesitation.
esure’s policy count advanced nearly 10% last year and the company pays a decent dividend. It’s also a share for my watch list.
I suspect sales will advance and the stagnant share price might then revive
I thought it was time to buy a new camera the other month. And a few hours of research pointed me to a Panasonic.
But during my internet trawling I came across a device called the Autographer. It’s an automatic camera that you clip on and takes photos as you walk about.
I liked the idea. For times when you want informal snapshots of events, such as family parties or days out, but don’t want the aggro of carrying a proper camera, the Autographer seemed perfect.
But at £300 a pop, it seemed an expensive gadget given the quality of the photos it produces. So I’ve not bought one.
Nor, it seems, have many other people.
You see, the company behind the device is small-cap OMG (LSE: OMG). And last week it owned up to the Autographer producing first-half sales of just £281,000 — equivalent to selling only 937 devices.
Anyway, I am putting OMG on my watch list because I like the Autographer concept. And when the £300 price is reduced and/or the photo quality improves, I suspect sales will advance and the stagnant share price might then revive.
It certainly helps me to invest
So there you go, three companies that have crossed my path of late and whose products or services look attractive to me.
Naturally I won’t invest in this trio blindly — I need to double check their accounts, valuations and so forth.
But it certainly helps me to invest if I have some first-hand customer experience, and know exactly what makes people hand over their money to help earnings grow.
