A Very Foolish Library

By SMMonohan
(SMMonohan@aol.com)

Since one of the objectives in Fooldom is to share information, we (my wife and I) thought this was our chance to give something back to the Foolish community considering what it has given to us over the past year or so. During our efforts to research the best investments for our portfolio, we have compiled a list of resources that has become our Foolish Library. These are resources we routinely use in researching the best industries/companies in which to invest. We hope everyone finds this beneficial.

Attention to all Pfizer investors out there in Fooldom! Did you ever wanted to know the process pharmaceutical companies must follow to get new drugs approved? Maybe some Fools out there want to get a better understanding of why Campbell's Soup decided to spin off much of its non-core businesses or what is Sara Lee's De-Verticalization business strategy? The S&P Industry Survey is a great place to start. This reference is compiled annually and here is just a sample of what it provides on numerous industries:

* A synopsis of the industry and how it operates,
* A list of the industry segments and size in revenue,
* The top companies within the industry,
* Information on any regulatory issues and barriers to entry,
* Key financial ratios and industry averages, and
* A good overview on how to analyze a company in the industry.

As any Fool can see, this is a great place to gain an understanding of an industry in which you might want to invest or to learn more about an industry in which you have already invested! Ok. So you have a good industry understanding, maybe even identified a few top industry leaders from the S&P Industry Survey. Well, remember one of the criteria all Fools evaluate is the strength of a company's product mix/portfolio. We can do this with the help of The Market Share Reporter. For example, how would Gillette look as an investment if you knew their brands ranked in their respective markets as follows?

Product Category Market Share Position
Razors & Blades (Gillette) 68% 1
Toothbrush (Oral B) 24% 1
Alkaline Batteries (Duracell) 40% 1
Antiperspirant (Gillette) 20% 2
Shaving Cream (Gillette) 20% 2

Now that you have a detailed understanding of the industry, a good understanding of the strength of your company's product mix, you probably want to review their financials and stock price performance in more detail. The Value Line Investment Survey is another great reference. Here, you can evaluate at a glance some key financial ratios of a company, the historical financial trends, and the historical stock performance, even a short synopsis of the company. (Of course, this should not substitute for your in-depth evaluation of a company's 10K & 10Q reports.)

Of course, it goes without saying that you should have a copy of The Motley Fool Investment Collection: The Motley Fool Investment Guide, You Have More Than You Think, The Motley Fool Workbook. Through these books, you can get a detailed understanding of how to evaluate individual companies as investment prospects.

Now, we are sure everyone is asking, "This is great stuff, but I can't afford this!" Well, don't worry. All this only costs the amount of time and gas to get to your local library! Well, with the exception of The Motley Fool Investment Collection. You may want to have your own personal copy of that. We do! Fool on, everyone.