There's no substitute for hands-on experience, particularly when it comes to investing. During the holiday season that means every one of the seemingly endless visits to stores and malls is another opportunity to come up with investment ideas to help pay for whatever it is you're buying.
This practice of shopping a company is just the first step in a stock picking process. Commonly referred to as "The Peter Lynch technique" in reference to Lynch's seminal "One Up on Wall Street" book, investing in what you know is one of the building blocks to successful money management.
Of course, you have to know what it is you're looking for when you shop. In the attached clip Brian Sozzi of NBG Productions runs through three specific qualities you probably want to see before rushing out to buy stock of the company from which you buy that sweater or toy.
1. Customer Service Slightly Better Than Expectations
The important point here is expectations. The way Walmart (WMT) treats its customer is different than the standard of care to be expected at Saks (SKS). A well-run company gives the customer what he or she should anticipate when they pull into the lot. At a discounter that means a clean store and a clerk at every register when the store is packed. At a high-end store exemplary service means "anything you want."
What a shopper should never feel is ignored, even if they're suspected of Showrooming. "Just because I have a smart phone doesn't mean I don't need attention," says Sozzi.Read More »from Investing 101: Three Things to Look For When Shopping for Retail Stocks