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Invest where you shop

Consumers can often see companies and products that are doing particularly well.

By Shawn Allen, Contributing Editor

In April of 2018 when I was visiting Ireland, my traveling companions were kind enough to indulge me as I sought out and visited a rather tired looking Topaz branded gas station/convenience store. The reason for stopping was that this gas station is owned by Canada’s own Alimentation Couche-Tard Inc. I’m an owner of Couche-Tard shares and have followed the company since 2005.

I’ve long been a fan of investing where I shop and even more so of shopping where I invest. It’s nice to be able to see what I have invested in with my own eyes.

Consumers see the good companies.

Peter Lynch in his best-selling 1989 book “One Up On Wall Street” was a huge proponent of getting investing ideas by simply looking around. His favorite example was when his wife noticed back in the 1970s that a then new brand of panty hose called L’eggs were being test marketed in grocery stores in colorful plastic eggs and were flying off the shelves. Lynch bought shares in the company which soon increased six-fold before being taken over.

Peter Lynch argued that as consumers we can often see companies and products that are doing particularly well.

Good choices in Canada

There are many examples of obviously successful businesses operating in Canada. Most Canadians will certainly have noticed the success of Tim Hortons, Costco, McDonalds, Dollarama, Canadian Tire, and lululemon. And the high profits of the Canadian banks have been in the news for literally decades. Millions of Canadians own and are addicted to iPhones and grumble about the high fees paid to the telcos. Not surprisingly, all of these companies have been excellent investments over the years.

In contrast, most Canadians could likely see that stores like Hudson’s Bay and Sears were struggling.

Visit your investments

It’s also not a bad idea to shop where you invest. The long line-ups at Costco and Tim Hortons are certainly easier to take when you consider the fact that the people in front of you are contributing to your investment success!

In the case of Couche-Tard’s Topaz store that I visited in Ireland, I could see that it was not up to the clean and bright standards of their stores in Canada. But I could also imagine how this could be an opportunity for Couche-Tard to invest in upgrading the stores to enhance profitability.

Prosperous looking companies where I have been both successful investor and satisfied shopper include Tim Hortons, Costco, Couche-Tard, Canadian Tire, Boston Pizza Royalties, Dollarama, Starbucks, and Apple. Those that I noticed were prosperous but neglected to invest in despite being a satisfied shopper include McDonalds, Disney, lululemon, Google, and Facebook. Many of these companies have been growing for years and are likely to continue to do so.

An obviously successful business is not necessarily a great investment (it may be too pricey in relation to earnings and expected growth) but such businesses are certainly worthy of a look.

This article first appeared in The Internet Wealth Builder newsletter on July 22.

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