Expert: Dr. Joseph de Beauchamp - 11/8/2006

Question
Hi Doc

As a part time investor, how do I do research on certain companies?    I occasionally read investment articles and the experts sometimes recommends certain stocks which I have no idea what it is.   For example, SUPG is recommended in BusinessWeek a few months ago.   I went to yahoo and checked out all the basics about the company.   What bothered me is that it has a negative income for each share.    The price went up 20% since then.   How and where else can I do further research using this company as an example?

Also any good websites on charts for different industry index.   My reasoning is that it is worth investing in blue chip companies in "non-hot" industry sectors.

One more question, let's say if I want to concentrate on investing in banks, where can I learn about all the banks (large or small) in North America and Canada.

By the way I am a long term investor.  I have no time to follow the stock closely and I don't really buy and sell a lot.   So I am looking for solid blue chip companies.

Thanks

Harvey

Answer
Basic rule:

Order up all the financials from a company. This can be seen on http://hoovers.com and then use the company link to find the correct email address. Accept nothing you see on the Internet. Get the paper copies and only use this information. Order the 10-k and annual reports. If they do not arrive to your doorstep, pass on the company.

Never invest in a company that you do not receive the full financials in the mail. This mandate will save you far too many days of your time, and you avoid all the scams.

Second rule, read the entire 10-k, similar to an annual report. If still interested, read all the news about the company, and call the investor relations or CFO. If you can not speak to someone --pass on the company.

I never fail this way and make sure you keep the chatter down on the Internet. Avoid all email scams and do your research this way. Warren Buffett and I do, and so should you.

In thirty years, look me up and tell me what you have found out about this method of research. You will thank me. Oh, and go ahead and google me as Joseph de Beauchamp. You will see that I have cover nearly 2000 public companies, so I know that you will greatly thank me in the distant future.

Dr. Joseph de Beauchamp