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I am Ben and welcome to motivation to invest our mission is to motivate you to invest for your financial freedom whether that means escaping the 95 drudgery or just improving your quality of life I'm here to help you by providing you with valuable investing tips and strategies Peter Lynch is one of the most successful investors of all time and as mutual fund manager at fidelity investments he produced an over 30% annual return despite market downturns during that time in short he beat the stock market which is extremely difficult and rare to do in his book one up on Wall Street he talks about the many advantages amateur and beginner investors have over large institutions now I did a full review on this which you can check out on a previous video I'll leave a link below so in this video I'm going to explore how you can select at em back a stock and make your one thousand pound investment tune into ten thousand pound one hundred thousand pound or even a million so these 10 points are very very interesting and very very counterintuitive to those who are in take large investing firms coin at number ten is to look for stocks and companies with a dull or ridiculous name now if a business or a stock is named Maori land pineapple Co large institutional investors will be very wary of investing in such a company even if the company has great cash flow great prospects great market share they still may be hesitant to invest in this company because if that company had problems or had issues they'd have to explain to their investors that they invested 50 million or 100 million or even a billion in to Maui lam pineapple Co and they cannot give them very good authority when they're trying to explain to Ana however there's a quote in the book and it says nobody ever got fired for investing into IBM now IBM is a safe blue chip stock and he definitely was back in the 80s when that this book was written and no large institution will ever say to one of their mutual fund managers right you're fired because you invested into IBM so even if these companies these large institutions are producing mediocre returns it's fine it's fine because that the mutual fund managers still gonna get paid he southern gates Commission and he's not going to look bad to the investor so but this opens an opportunity for amateur investors you haven't got to explain to a boardroom why you chose Marilyn pineapple CO over IBM you haven't got to explain that to anybody you just look at the facts the figures the prospects of the company and if that company is going to produce you a 10x return then it's a great investment who cares what the name is what large institutions do this brings me onto number nine number nine is the company does something dull so if the business does something really really dull really just not interesting at all many large institutions will not even notice the company in terms of its progression or how its how it's working how it operates for example could be called a bottle cap Co and these supply bottle cups for bottles now that is not a very exciting industry it's not a very crazy industry but if they're the market leader in that industry and they have great cash flow great prospects they're number one and they're growing in their undervalued as a stock because no one's really noticed them then it could be another potential great investment and the large institutions will just miss out on this because they won't be investing in such an obscure door sounding company and even a lot of private investors they just they just weren't invest in it because it just sounds boring people invest in things that more exciting like all tesslar or Apple or Google it's just a bit more exciting and interesting and those are good stocks as well in terms of getting undervalued stocks you can get those a lot if a stock has a dull name and that brings me neatly on to number eight and that is investing into a stock if it does something which is disagreeable so burial companies are a great example of this so there's a certain burial company in the USA and it's just got a massive market share it's obviously got repeat custom because people are always dying and it's just got great potential great cash flow great balance sheets it's a great business overall but because it does something disagreeable burying people funeral services it's often overlooked as a stock no one no one really wakes up in the morning says right I want to invest in a varial company it's just not got that sex appeal about it which other stock investments may have but that can mean it can often be overlooked same with a boring company and you can get a great value stock there which can give you 10x return this bring you down to 0.7 which is it's a depressing company for example this could be a company such as say roadkill CO and their job is to collect roadkill from the side of the road now that is something a bit depressing it's not that engaging or exciting but they could be number one market leaders in that business they could have great cash flow they could have great expansion and they're just gonna get a lot less competition people don't wake up in the morning and say I'm going to create a roadkill collection company they just don't do that the wake up and say I wanna create a a bar company I want to create a new app I want to create a new rocket ship like they'll they'll create new exciting companies number six is look for a business which institutions don't own so you can actually check out a lot of these factories public available information you can check whether a stock is owned by manage large mutual fund investment institutions because they all seem to go for the same stocks so if it is owned by these institutions which many good stocks are as well you can imagine a lot cattles gonna be poured into those companies thus the stock price will be usually heavily heavily inflated however if the company has not been discovered yet usually if it's a smaller cap stock large institutions won't bother investing into a real small cat stock because it's just not worth it for them to even just get involved so that means as an amateur investor so you can observe these smaller cap companies which you know are doing really well and you can decide to invest in them early and get a great share price and get the full growth of that company which they can be over 50 60 percent a year which is fantastic and much better than you'd get from a large Institute or a large stock on the sp500 for example another interesting stock to look for is in an industry which isn't growing now the idea behind in an industry which isn't growing is to look for stocks which will have less competition because it's not this new and exciting industry it's a very very established industry which you're very unlikely to get vast numbers of new competition coming in so coca-cola obviously soft drinks beverage company they've been assigned to a very very long time very successful stock they've got a real monopoly on the market because they don't just do coke all they do all the other sports types of soft drinks so when you're choosing a stock soft drink most likely you're gonna be paying them now yes competition can come in for example innocent and who had the smoothies they came in exciting new company with main points on health looking after your body fruit smooth which complete opposite to coca-cola however what did Coke do they just acquired them so coke just purchased innocence movie company and then now they own them under their coat collar umbrella now not many people know that so the loyal customers of innocence movie they'll go there that still buy the product or still be happy they'll still feel like they're doing something for the environment and their health however it's owned by coca-cola that's an industry which isn't growing say as fast as artificial intelligence or electric vehicles like electric vehicles it's definitely going to be the future so you can expect a lot calm addition in that area any new technology expect a lot of competition like I remember when Bitcoin and cryptocurrency when they suddenly boosted into popularity a million websites popped up online a million businesses offering crypto currency exchange cryptocurrency investments cryptocurrency trading so I think there's a new industry a lot of competition just developed I know where because no one was really established as the number one in that industry number four is in a niche so if a business or a stock is inside a very specific niche it's likely to be one of the best in that niche for example if you have industry specific knowledge if you work in the medical profession you may know a certain type of chemical is number one to fix this certain type of disease and you know that every doctor in the country uses a specific type of chemical now that could be an interesting start to look up and if this company just makes this chemical but they've got them monopoly on that market or this certain medicine then that could be a great investment and it's worth doing some further investigation to do some more research into if that stock is a great investment but if they are number one in their niche and they have the whole area boxed off it can be a great investment and it can often be overlooked by large institution number three is the company has recurring revenues so these are companies which may have a subscription service or repeat custom so Spotify is a great example of this Amazon Prime is a great example of this Netflix is a great example of this these are companies of which their customers are run a subscription-based service now this means the company can build up a massive customer base and then just build their new customers on top and their new customers on top and their new customers on top whereas certain industries the custom might only purchase their product once and then they never see their customer again or maybe twice and then they'll never be able to sell to that customer again except having to sell a new product to them via email but with subscription services you've got that customer for a very very long time it just means the customer value is a lot higher number two is to look for the businesses which use products and services which you enjoy so a great way Peter Lynch mentions in the book is if you're using a specific products or service a for example Netflix use Netflix or your friends news app folks you know everyone else is using Netflix and say this was ten years ago and you're thinking okay this could be an interesting stock and you do a bit more research obviously you notice that VHS is going out DVDs going out and you start doing a bit more research in the company and you see is a fantastic company and you get on that stock on its small then you would have achieved fantastic returns by now coming in number one is insiders are buying back shares now this is something you should really check out before invest in a company you should research if board members in the business are purchasing shares in their own company this shows that the company has faith in itself and they obviously have some inside knowledge about how well company is progressing and if they are optimistic about the future now there's one caveat to this you should be aware that certain companies which maybe don't have too much integrity at the top they may buy back the shares in order to inflate their stock price falsely however earnings always correct those inflation now I did a more detailed review of Peter Lynch's book one up on Wall Street and so I'll leave that in the link below and i also did a detailed video on how to analyze and value a company before investing in it and I used the warren buffett method which I managed to invest in a few companies recently I was making approximately thousand pounds a week off this investment but I'm a long-term investor so it doesn't really make a difference to me but still it shows valuable strategies of how you value a company and choose the right company to invest in so if you have any thoughts on the points I mentioned previously I would love to hear them so yeah drop them in the comments below
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