Rule One Investing Blog

This is part two of my posts on the three circle exercise.

In the first part I did the exercise of writing things that I’m passionate about, am good at and spend my money on. From the results I found that companies with meaning would be companies that deal with sports, travel, cooking. In addition, when looking over that article and doing research for this article I found that I missed the technology industry. I am an engineer and spend quite a bit of time on technology related things… So to be fair I’m adding technology to my list.

I now have four main categories (Sports, Travel, Cooking and Technology). Today, I’ll investigate sports a little deeper, one of my greater passions!

So what are some big companies that are related to sports? Nike, Reebok, Under Armour…. If I go to Google and type in NKE I can see that Nike is in the Sector: Consumer Cyclical and Industry: Footwear

Other companies (on the NASDAQ) in the same industry include Timberland, KSwiss, Crocs and Sketchers. I do shop at Eastbay quite often and have different size feet, so, I guess this industry does have meaning to me.

What about actual sports equipment though? Things like Golf, Tennis, Skiing, Soccer, etc… Companies that come to mind are Calaway, Prince, Yonex, Umbro. Let’s type in a few companies and see what we get for an industry. Calaway (ELY), Prince. Similar to Nike Calaway is in the Sector: Consumer Cyclical and Industry: Recreational Products

Looking at companies in this Industry I see Harley Davidson, Brunswick, Polaris, Calaway, Pool Corporation, Jakks Pacific, Head and Artic Cat.

So now I have a list of companies that I can investigate further. I’ve added all these companies to my current Watch List and will update that list as I remove non-Rule #1 companies from the list.

Note: I only mentioned companies that I recognized. My assumption is that if I know the company it will have a greater chance of having a moat.

Neat Google Tip: You can simply type the area of interest in Google Finance and you’ll come up with a list of companies that deal in that industry. For example: Golfing