Where to look for investment ideas?
Where to look for investment ideas? "I'm no genius . I'm smart in spots — but I stay around those spots ." — Tom Watson Sr., Founder of IBM I have thought about this for many years, the question really is "how do I decide where to become good at", in investing people call it a "circle of competence". Why is it important? 1) you need to minimize risk when investing or you are not going to be around for long, and risk is not knowing what you are investing in, and by "knowing" I really mean "predicting the outcome". To predict the outcome of something like an investment not only do you need to understand all the moving part of that investment, but the moving part of the competitors, and other industries that could eventually affect you. It's a lot of work! So that's why you stick to what you are familiar to (by the way this doesn't mean you can not learn about other interesting industries, c