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Hi guys, welcome to another ways to fatten your wallet video log, today we are looking
at investor concepts for Scuttle butting. What is Scuttle butting? It is an essential
investor concept and it helps investors, private investors, firm managers and people in the
industry, get an edge on everybody else. Essentially, you are looking to find out as much relevant
information pre-investment and also even when you have invested in a stock, to find out
whether this stock is good for investing. But how can you do that? The main way, that
you probably already know about, is looking at the company via annual reports, looking
at their website, maybe tracking them in the news etc. But Phillip Fisher, what he did
is, he found a way to find out extra information, he called it Scuttle butting.
So, what is Scuttle butting? Basically, traditional Scuttle butting is, what he recommended is,
visiting stores, speaking to the employees, speaking to the staff, maybe even speaking,
if you can finding ex-staff. He did recommend, not always taking what ex-staff members have
said purely to heart because especially if they were fired or let off maybe made redundant
etc and they will not always be accurate, but you can still get some information from
that, question the current staff. Then there are some creative ways of Scuttle
butting and he recommended going to trade shows, because there you are speaking with
(sometimes)directors, operational managers of the business you are looking to invest
in and their competitors, and you can ask them questions. At the time they are being
paid to be there and at the time where anyone, even members of the public can go and talk
to these people and ask any question you want really. You can also look at trade shows,
you can look at conferences, employment shows, some retail organizations or some of the larger
organizations, attend employment shows for graduates etc, you can ask questions at those
events. AGM's are a fantastic opportunity to ask directors
questions. You can do it via the questions where it is an open platform or if it is a
smaller AGM, you can often get specific one-on-one time with the directors afterwards, wherever
they might have drink or coffee or whatever it is.
So, lots of different ways and he also recommended that we should always be asking the prospect
company, instead you can be looking at competitors. So he recommended talking to managers, sales
managers or people that are in charge of competitors and asking about the entire industry, asking
who is the strongest, why. You can find out things like profit margins and all that kind
of stuff online, by looking at their accounts, but things like who has got the competitive
advantage, who do you see growing, who would you shop at or which services of which company
would you recommend, who do you honestly think is doing the best of this or doing the worst
of this. A lot of managers and sales people, if you
catch them at the right moment will be honest, they are not always going to be, trying to
sell, especially if you are very straight forward with them and you are saying you are
not interested in buying, you are just interested in finding out some information, they won't
always give you a good story about the industry and the competition, etc.
In the next video I am going to look at Modern Scuttle butting, so there are other methods
that you can utilize nowadays using technology and leveraging different ways where you can
find out more information in a more direct manner.
But these are all good, so just a recap: store visits, question staff, existing and if you
can find ex-staff as well, creative takes on Scuttle butting are trade shows, employment
shows, conferences, and AGMs (annual general meetings), both the questions during and after.
I am on twitter, it is @jw99, and my blog is www.waystofattenyourwallet.blogspot.com.
I utilize the hash tags #fattenwallet and #fatwallet. Subscribe, and it will be really
interesting to hear your ideas if you have used Scuttle butting in the past. Also any
ideas in any of the videos do have a look at my other investor concept and I am also
going to be looking at, we are going to be having lots of case studies, I am going to
be talking about my own experiences etc. It would be really great to hear from you, take
care, cheers.