LOOKS LIKE ! $$$$$$$PETER HODSON ! FINIACIAL POST ! JULY 2014
Pick companies with accelerating growth/dominant industry position
One of the best signs of future investment performance is an acceleration of growth rates. A fast-growing company that speeds up is often a big long-term winner.
Look at quarterly growth rates for signs of improving market share or new product acceptance. Make sure to compare company growth rates with industry growth rates to find those that are truly standing out.
If you can find companies that also have a dominant industry position, you may also have a long-term winner. Facebook Inc. (FB: Nasdaq) has its supporters and detractors, but few could argue against its 1.4 billion users and dominant social media position right now.
Doubling up or even tripling up on winning stocks is certainly not advised for everyone. If something goes wrong with a giant portfolio position, it can take years to recover from the loss.
However, if you can manage to find an investment gem and increase its portfolio position as it grows, you then really only need one stock in your whole investment career to make yourself wealthy.
Peter Hodson, CFA, is CEO of 5i Research Inc., an independent research network providing conflict-free advice to individual investors (www.5iresearch.ca).