I've been re-reading Peter Lynch's classic book One Up on Wall Street -- something I think every Fool should read two or three times a decade -- and as with any favorite book, there are a few bits that always stick with me. Here's one biggie, what Lynch calls the "two-minute drill":
Before buying a stock, I like to be able to give a two-minute monologue that covers the reasons I'm interested in it, what has to happen for the company to succeed, and the pitfalls that stand in its path.
Now there's a good discipline to adopt. It's one thing to think you see an intriguing story behind a stock, and another thing entirely to understand the story well enough to be able to tell it -- even if you're just telling it to your cat.
If you have an attentive human audience, you'll be able to find out whether you're really on to something, or whether you're just fooling yourself. Better yet, give the pitch to someone who understands stock picking. A friend who knows the ins and outs of fundamental research can show you where and how to look for things you may have never considered.
But what if you don't know anyone else who is interested in investing? Plenty of people rely on recommendations from financial advisors at places such as Ameriprise
Fear not. You've come to the right place.
Yeah, yeah, it's a sales pitch
You know what I'm going to say, right? I'm going to say that writing up your pitch and posting it to the Fool's discussion board community is a great way to get feedback from smart people who are into investing, not to mention one of the fastest ways to improve your stock picking skills in a hurry.
Yes, there is a fee for using the Fool's boards -- $29.95 a year, to be precise -- but have you noticed how overrun the free sites are with penny-stock pumpers, wannabe market manipulators, spammers, and the like? You get what you pay for. Thanks to a few simple, unobtrusive rules -- and that fee -- the Fool's discussion boards are refreshingly clear of headache-inducing nonsense. The regulars on our boards are the brightest, friendliest, most knowledgeable individual investors you'll find on the Web.
But unlike some Web communities that have attracted an advanced crowd, the Fool's boards also welcome newbies. We have a whole section for investing beginners, where friendly folks help novices figure out up from down -- and help them understand why hot names like Starbucks
Join us today -- you can even get your first month on us with no obligation. It might be the best thing you ever do for your financial future.
Fool contributor John Rosevear does not own any of the stocks mentioned in this article. Berkshire Hathaway is an Inside Value recommendation, and Starbucks is a Stock Advisor pick. The Motley Fool has a disclosure policy.