TALK TO CORPORATES

“My personal rule was that once a month I ought to have at least one conversation with a representative of each major industry group, just in case business was starting to turn around or there were other new developments Wall Street had overlooked. This was a very effective early warning system.  I always ended these discussions by asking: which of your competitors do you respect most?  When a CEO of one company admits that a rival is doing a good job or better, it’s a powerful endorsement.  The upshot was that I often went out and bought the other guy’s stock” Peter Lynch

“Start by looking at 7-8 companies in the industry and ask the management typical due diligence questions. Also, ask the management of each company which competitor they would be willing to put their net worth in for the next 10 years. Then ask which of their competitors they would short. This will provide important insights into the industry that even those who work their whole life in the industry would not realize.”  Warren Buffett

"Go to five companies in an industry, ask each of them intelligent questions about the points of strength and weakness of the other four, and nine times out of ten a surprisingly detailed and accurate picture of all five will emerge" Phil Fisher

“One of [Shelby] Davis’s favourite questions was “If you had one silver bullet to shoot a competitor, which competitor would you shoot?” He’d get the answer, and make a note to research the competitor’s stock. A company that was feared by its rivals must be doing something right”  The Davis Dynasty

“Following Soros’s practice too, Druckenmiller stayed in touch with company executives, reckoning that on-the-ground stories from firms could provide early warning of trends in the economy” Sebastian Mallaby

“When a management team compliments a competitor, this can be like gold dust for an investor”  Marathon Asset Management

“You might even find a new idea through management’s discussion of their competitors” Whitney George

“There is a big difference between informed sentiment, like CEO’s, and investor sentiment. Investor sentiment, however, is usually wrong, at least over the longer term”  Joe Vidich

“I did a lot of work in the earlier years just getting familiar with businesses and the way I would do that is use what Phil Fisher would call, the ―Scuttlebutt Approach I would go out and talk to customers, suppliers, and maybe ex-employees in some cases. Everybody. Every time I was interested in an industry, say it was coal, I would go around and see every coal company. I would ask every CEO, ―If you could only buy stock in one coal company that was not your own, which one would it be and why? You piece those things together, you learn about the business after a while.   Funny, you get very similar answers as long as you ask about competitors. If you had a silver-bullet and you could put it through the head of one competitor, which competitor would you choose and why? You will find who the best guy is in the industry. So there are a lot of things you can learn about a business.” Warren Buffett

"We do get great access to management, we go talk to them. Often the most valuable parts of those meetings are not when they're talking about themselves or their company and how great it is, but more so when they talk about their competitors, because there's often nothing as valuable as someone who's not incented to talk up somebody – you know, often begrudgingly giving them respect, and that's often the place where we find new ideas as well" Ross Glotzbach

"Visiting a company doesn't mean you have to - or even want to - own that company. Some of the most valuable information we pick up about an industry comes from talking to companies we'll probably never own. They may be competitors of companies we do own. Managements can be guarded, especially if they know we own a lot of their stock. But their competitors will usually talk freely about them" Ralph Wanger

"I think the main thing is management, getting good management, and checking with their competitors, checking with their compatriots, their suppliers, and finding out, really, if they are good"  Julian Robertson

"Some of my best sources are business people, because they give me a flavour of what's going on" Barton Biggs

"I learned long ago that if you make 10 inquires at 10 different companies, you are going to discover at least 1 unexpected development. Unexpected developments are what makes stocks go up and down" Peter Lynch

"At the end of the day, if you haven’t spoken to a few companies in existing positions or on new ideas, you go home a failure. That’s a good discipline – you should spend your day talking to operators, not to Wall Street." Jeffrey Ubben

"We try to talk to competitors. We try to find people more knowledgeable about the business than we are. We do not rely on Wall Street-generated research. We do our own research. We try to meet with top management."  Lou Simpson

"We always ask around, get third-party opinions from the company's suppliers and customers and others in the same industry" Ralph Wanger

"I follow about 250 public companies every quarter. And so I go through, for each quarter each one of those companies, their quarterly reports. So a lot of S.E.C. filings. A lotta transcripts. I can read a transcript much faster than I can listen to the conference call. And you weed out some of the friction there as well.  So a lot of S.E.C. filings. A lotta trade magazines. There are a couple dozen of those that I subscribe to. And then I have a wonderful analyst who helps me with channel checks where we talk to customers, suppliers, ex-employees and so forth. We’re really trying to get a view of what it would be like—every security that we look at, we’re really trying to get a sense of what it would be like to own the entire business.” Todd Combs

"Reading the printed financial records about a company is never enough to justify an investment. One of the major steps in prudent investment must be to find out about a company's affairs from those who have some direct familiarity with them" Phil Fisher

"The second thing we do [after ensuring an understanding of the business] is gather evidence through primary research. Here we talk to counter-parties to get answers around business quality. Customers, former employees, competitors, people that are somehow involved in the vertical in some way. It’s all very important. They can be anecdotal, but I think collectively once you've done all your work, it fills in a very clear picture." Christopher Begg

"In every market we speak at length with those inside and outside the company, including suppliers, customers and competitors." Francisco Garcia Parames

"If and when you decide to pursue investing or whatever your fancy, do not underestimate the value of due diligence... Talk to customers, suppliers, competitors, and anyone else who might affect the company. Do not invest unless you can say with absolute certainty that you are more knowledgeable about this particular firm than 98 percent of Wall Street analysts. Believe me, it can be done. But only with the extra effort" Jim Rogers