Ideas Are Everywhere — If You’re Paying Attention

by Thomas Shipp of LPL Financial, 11/13/25

Take a Step Back and Look Around

Investing in the stock market today can feel overwhelming to both the average retirement saver, as well as a seasoned professional. Investing in tomorrow’s next-gen tech darling demands a high degree of confidence in your ability to predict the winners of the future, or faith in the narratives told by tech promoters and/or CEOs. Quantitative investing seemingly requires a large amount of capital, expensive software with reams of data, and a PhD in computer science. Investing in meme stocks requires time dedicated to social media and joining crowds seeking generally low-quality speculative stocks. Add today’s diminutive attention spans, and it’s no wonder so called “passive” investing has attracted so much capital; it’s one less thing to worry about, and in this regard, sitting in the passenger seat has paid off.

While we could spend an entire blog on the risks embedded in such “passive” indexation today, namely concentration and not “knowing what you own,” today we offer a positive inversion — “owning what you know.” Made famous by legendary investor Peter Lynch in his seminal book, “One Up on Wall Street,” where the overarching idea is that average investors can beat Wall Street by investing in what they know. By paying attention to the products and services you see every day and applying a critical approach to uncovering the best (and worst); while ignoring market noise and fear of missing out (“FOMO”) inducing financial press, average investors can pursue long-term investment success. A popular anecdote from Peter’s book that illustrates this idea is Magellan Fund’s investment in Hanes. Peter’s wife raved about a new product called L’eggs — department-store-quality pantyhose, or hosiery, sold in a distinctive plastic egg shaped container at grocery and drug stores. Peter dug into this new product from Hanes and realized that L’eggs’ target market (women) visits grocery and drug stores typically once a week, or six times more frequently than they visit department stores, showing a large product advantage in terms of distribution and accessibility. Further due diligence into Hanes’s fundamentals led to an investment that over time appreciated in value 10x.

One could poke numerous holes in this strategy — overreliance on consumer-facing companies being the obvious criticism — but this is true of any investment strategy. Seeing legendary professional investors incorporate aspects of this approach into their mosaic firsthand gives me confidence that the benefits can be realized.

Buy (and Sell) Ideas Are Everywhere if You Are Paying Attention

Early in my career, I worked at a large investment manager and one of my responsibilities was managing the portfolio managers (PMs) and analysts’ external research budgets. This largely administrative task gave your young author great exposure to professional investors, and at times allowed me to be a fly on the wall when ideas were shared among the PMs. In one of these times, I was sitting in a PMs’ office when another stopped in and mentioned that he was just on the subway and noticed that none of the kids he saw were wearing a watch. Lots of iPods and cell phones, but not a single wristwatch. He said they needed to dig into their portfolio’s position in a mass-market watch company. This was 10+ years ago, and I cannot confirm the seemingly off-the-cuff comment verbatim, nor can I confirm whether that observation led to the fund selling their investment in said watch company, but it’s beside the point. That experience has stuck with me, as it showed that investment ideas don’t always come from crunching numbers in a spreadsheet or from current price action, and that successful investors rely, at least somewhat, on instinct and what they can see with their own eyes. This observational analysis also led to a contra-investment idea — providing the spark for an idea that led the team to reassess their own thesis on the stock and potentially get ahead of decelerating growth in sales for the company’s core product.

Investing With Conviction, It’s a Family Affair

The strategy of owning what you know also integrates well into the overall mosaic of an investor’s investment philosophy. As a first-hand example, my own quantitative research efforts generate signals on hundreds of companies, but we cannot, nor want to manage that many positions in a portfolio. At times, the signals point to multiple stocks in the same industry, and firsthand experience with those company’s products can provide useful context to truly understanding the businesses, leading to greater conviction in one’s ultimate decision when it comes time to choose just one. In this case, my lifelong passion for video games led me to one game company over another when both scored well quantitatively, and it remains one of my highest conviction positions.