Finding the Next Superstock

Want to learn how to find the next superstock? I'll show you a simple method that works on all potential super stocks and can be done in 15 minutes. Very little fundamental analysis needed. Who has used this method? Peter Lynch used it to take the Magellan Fund from $20 Mil to $14 Billion in just 13 years. His famous quote is "If you spent 13 minutes analyzing the fundamentals of a stock, you wasted 10 minutes!"

Here's an example of the "Peter Lynch" way to analyze a stock when you find a stock that you think may have great potential. My daughter got a job at a large company in Sant Barbara that created and sells property management software. The compnay had it's IPO in June of 2015 at around $12. She asked me my opinion, and I told her let's use the Peter Lynch way. I showed my daughter how to analyze this company that had given her stock at $12/share, and the first thing was to look at the story. Who started the company & what was his track record? How innovative was the product or service? And are the sales & earnings climbing steadily? Based on this simple analysis, she decided to hold onto the stock they gave her. What happened? The stock went up over 1,400% in 4 years. And it's still making new All Time Highs (ATH) as of this writing. The company is Appfolio (APPF).

Hey, I'm not a Financial Advisor & this is not Finacial advice of any kind. And my daughter knew this, but she also knew I started trading stocks, using options for leverage, in 1979 at 28 years old. And she knew the story of my making enough money that 1st year to buy a 2-story home, two cars, 1/2 interest in a twin engine Baron airplane, and booking a Lear Jet to go to Las Vegas with friends. Yes, I went a little nuts, but hey, I was 28 years old. I was raised middle class and never missed a meal, but I had zero wealth training, and all of a sudden I had more money that I thought I would retire with one day. Fortunitely I did make some good investments, and started a home building & investment company, as my trading was having ups & downs like a Six Flags roller coaster. But that's a story for another time..

By the way, this same story has played out with almost every Superstock such as Apple, FaceBook (Meta), Netflix, Chipotle, Home Depot, Walmart, Nvidia, and so on. Notice how almost all of these compnaies are very well known and not some bizarre Biotech. Or a hot "tip" from TV or some internet news feed. Sure, some of these stocks have been tech related like Nvidia, and the Tech stocks have driven the huge bull market that started in March of 2009 that lasted 13 years, but most of these stocks are hard to miss. How powerful could this type of information be if you studied the history of Superstocks? No way to know but I can tell you that if you had invested $10,000 in Google back when it went public in 2004, it would be worth over $10 Million today. Google it!!

So, the takeaway I told my kids was that this simple, and repeatable analysis, in my opinion, does not go out of style. And it seems unfortunate that 99% of the public who owns stock in their 401K's and invests for speculation, don't seem to use this common sense approach. They seem to think that finding a Superstock is 99% deep dive critical research, endless crunching of financial data, and somehow processing a myriad of news articles about their favorite stock. But how many Superstocks have you found this way..