It's every investor's wish – choosing that low-price share that is about to set the market alight with its astounding growth. Within months, you'll be sipping champagne on the deck of your own private yacht in the azure Mediterranean!
While we can all share in this delightful fantasy, the reality is that this share growth question has been asked by virtually every share market investor forever. While there is no 'silver bullet' answer, there are some sobering tips we can follow, with a little self-discipline.
Start by looking for real ideas
There is no reason to believe that a product, service or concept that has been around for years is going to suddenly provide you with the huge growth you're looking for. When Apple launched its Mac and iPhone, they were brand new concepts. They have since gone on to record exponential growth and made Apple one of the world's leading international companies!
Closer to home, the same was true of the Cochlear Limited (ASX: COH) implant to overcome hearing problems and the many innovative products of Australia's own CSL Limited (ASX: CSL) when it launched.
So, what is new today? Which companies have presented to the ASX with uniquely innovative ideas? Find those companies and you could be onto the answer.
Ask questions. You'll be surprised what you can learn
Information is vital to every investor. When you ask questions instead of making statements, you'll often be surprised and delighted with what you hear. Most people are only too happy to tell you all about their jobs and their company. You can learn a lot.
The short of what I'm suggesting here is that you can turn your curiosity into a valuable resource and learn a lot simply by asking questions.
Should you study the charts?
This discipline underpins the choice of shares for many fund managers but may only rarely reveal shares that fit the categories described above. Charts analyse the history of a share's price rather than predicting what is likely to occur in the future.
So, the short answer is 'no'. This is not to say that information can't be gleaned from charts, but they tend not to be predictive tools.
It is a very good question!
Every investor dreams of finding that magic share that will generate stratospheric growth and create brilliant returns. We've discussed some tactics to help you find these opportunities but also pointed out just how difficult it can be.
So good luck in your search. Try some of the strategies discussed in this article and put them into practice. Who knows, you could be sipping champagne on your own private yacht any day now.
