One Up on Wall Street

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

All along the retail and wholesale chains, people who make things, sell things, clean things, or analyze things encounter numerous stockpicking opportunities.

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

The same couple that spends the weekend searching for the best deal on airfares to London buys 500 shares of KLM without having spent five minutes learning about the company.

My advice for the next decade: Keep on the lookout for tomorrow’s big baggers. You’re likely to find one.

If you can follow only one bit of data, follow the earnings—assuming the company in question has earnings. As you’ll see in this text, I subscribe to the crusty notion that sooner or later earnings make or break an investment in equities. What the stock price does today, tomorrow, or next week is only a distraction.

If you’re considering a stock on the strength of some specific product that a company makes, the first thing to find out is: What effect will the success of the product have on the company’s bottom line?

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

This great acquisitive era ended in the market collapse of 1973–74, when Wall Street finally realized that the best and the brightest were not as ingenious as expected, and even the most charming of corporate directors could not turn all those toads they bought into princes.