You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
GROWING RICH WITH GROWTH STOCKS<br />
areas of the market or industries that you know and understand like<br />
the back of your hand. By cultivating a close relationship like this,<br />
you will be better able to make intelligent investment decisions, while<br />
keeping up with changing trends in the field. Davis’s son Chris has<br />
also developed a circle of <strong>com</strong>petence in the financial services area,<br />
namely with banks and insurance <strong>com</strong>panies. His other son Andrew’s<br />
goal is to be<strong>com</strong>e the dean of real-estate investment trusts.<br />
Your circle of <strong>com</strong>petence could be the industry you work in. If<br />
you’re a <strong>com</strong>puter programmer, for example, you might decide to<br />
follow software stocks. You presumably already know the business<br />
well. You live and breathe it every day. So when you hear about a<br />
<strong>com</strong>pany in your field that sounds promising, you’ll be able to make<br />
a rational decision as to whether it’s a good investment, since you<br />
understand the conditions under which it operates. This doesn’t mean<br />
you buy only stocks of <strong>com</strong>puter software developers. You would<br />
never want to concentrate all of your money in one area. But you<br />
can make this sector a healthy part of your portfolio.<br />
THE BOTTOM LINE<br />
Always be on the lookout for promising investment ideas. Keep an<br />
eye on what products you use the most and what your kids are buying.<br />
Then, figure out how you can profit from them. In addition, look for<br />
broad trends in the economy and determine which <strong>com</strong>panies are<br />
likely to benefit from them the most.<br />
69
Change language