Many times, the big investment idea that occurs to you will turn out to not be quite as attractive as you initially expected. But all is not lost. Don't jump into those ideas without first taking the time to look on the fringes for related possibilities. Here are some specific examples:
Forbes magazine recently reported: "If Smarty Jones wins the Belmont Stakes this weekend, he'll be a rare breed indeed: a horse that actually makes money for its owner." (Of course, Smarty Jones was outsmarted.) While investing in racehorses -- not to mention betting money on racehorses -- is a losing game for many, a related article pointed out how profitable horse farms can be. (Rex Moore discussed the downside of playing the horses in this interesting article.)
- Bill Hilliard and Charles Baden-Fuller, visiting scholars at the Wharton Business School, have noted that Eli Whitney, the inventor of the cotton gin, "would have made exceptional profits if he had abandoned his attempts to patent the machine and instead focused attention on investment substitutes by buying up land suitable for raising cotton, which at the time was trading at very low prices." In other words, once Whitney saw the future, that cotton would be big(ger) business, he might have tried to profit in other different ways.
- The restaurant business is a notoriously difficult one. Diners can be fickle. Operations can be labor-intensive. Food spoils. Foods go in and out of favor -- think of the current popularity of low-carb and organic foods and such fads of yesteryear as fondues. But while businesses such as McDonald's
(NYSE:MCD), Outback Steakhouse (NYSE:OSI), Darden Restaurants (NYSE:DRI), Wendy's (NYSE:WEN), BrinkerInternational (NYSE:EAT), and Yum! Brands (NYSE:YUM)have had their ups and downs, taking investors with them, a related company that supplies them has been on a long, fairly steady upward climb. Think Sysco (NYSE:SYY), the food-service distribution giant. (Tim Beyers reviewed the company's valuation.)
So next time you're looking at an exciting company, think tangentially. You might find some even more promising investments on the sidelines.
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Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.