One Up on Wall Street

YOU: “What is it about La Quinta that makes it a good buy now? Where is the market? Are the existing La Quintas making a profit? Where’s the expansion coming from? What’s the debt situation? How will they finance growth without selling lots of new shares and diluting the earnings? Are insiders buying?” BROKER: “I think a lot of that will be covered

To top it all off, I was delighted to discover that only three brokerage firms covered La Quinta in 1978,

Mr. Biegler said they had a specific target: the small businessman who didn’t care for the budget motel, and if he had the choice, he’d rather pay less for the equivalent luxury of a Holiday Inn. La Quinta was there to provide the equivalent luxury, and at locations that were often more convenient to traveling businessmen.

It turns out that most hotels and motels lose money on their restaurants, and the restaurants cause 95 percent of the complaints.

it is a fast grower, then where and how can it continue to grow fast? “La Quinta is a motel chain that started out in Texas. It was very profitable there. The company successfully duplicated its successful formula in Arkansas and Louisiana. Last year it added 20 percent more motel units than the year before. Earnings have increased every quarter. T

(The Value Line Investment Survey, available in most large libraries and also from most brokers, is another good source for p/e histories. In fact, Value Line is a good source for all the pertinent data that amateur investors need to know.

People who work in secure jobs that pay low salaries and modest raises are slow growers, the human equivalents of the electric utilities such as American Electric Power. Librarians, schoolteachers, and policemen are slow growers. People who command good salaries and get predictable raises, such as the middle-level managers of corporations, are stal

If the loss of one customer would be catastrophic to a supplier, I’d be wary of investing in the supplier.

What I try to remind myself (and obviously I’m not always successful) is that if the prospects are so phenomenal, then this will be a fine investment next year and the year after that. Why not put off buying the stock until later, when the company has established a record? Wait for the earnings. You can get tenbaggers in companies that have already