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Ideas can come from anywhere. Whether you are using a new game-changing software at work, are being hounded by your kids to buy them the latest fashion trend, or trying the most delicious new food or restaurant, these are all experiences that could lead to your next great investment, writes Berna Barshay, editor of HedgeFundGirl.

Here’s one anecdote to illustrate this concept. Back in 2011, I read a random article in the now-defunct Entertainment Weekly magazine about the casting of a promising young actress in the adaptation of a popular young adult novel. I had seen the actress in a small indie film and thought she was a huge, up-and-coming talent.

Then something in me clicked, and I realized I had been seeing tons of teens in my neighborhood carry the book upon which the movie would be based. So, I picked up a copy of the book to check it out, and I even consumed it all in one weekend.

While I was a Comparative Literature major in college, I am a woefully slow fiction reader and I am terrible at getting through fiction books these days. The fact that I tore through a whole book in a weekend means it was really a page turner.

It turned out the film was being produced by a movie studio that I had owned stock in earlier in my hedge fund career. It didn’t take me long to run though the financials and determine that if the movie did even $150 million at the domestic box office, the company’s stock would at least double. That was the financial analysis piece -- most good analysts could have figured that out, if they took the time to assess it.

But the key insight was the qualitative one. That the story was a winner, and the casting of the heroine was spot-on. I believed strongly that based on these two things alone, the movie would be a hit. That’s qualitative analysis – and it’s art rather than science.

Because of the element of conjecture or 'gut feel' in it, many investment professionals eschew it as an input. But I think that’s a mistake – because qualitative judgment is the special sauce that makes us unique as investors.

The actress was none other than Jennifer Lawrence, and the movie was The Hunger Games, which went on to make $408 million at the domestic box office and spawn three profitable sequels (as well as a prequel that is coming out this fall). The studio was Lions Gate Entertainment (LGF-A), and its shares went on to quintuple in the three years after I read that magazine article.

Bottom line? Again, investment ideas can come from anywhere. Your unique personal history can put you at an advantage for having your mind click about a potential investment the same way mine did with Lions Gate and the Hunger Games franchise.

About the Author

Berna Barshay recently launched a Substack financial blog under the handle HedgeFundGirl, which is also where you can find her on Twitter. Every week, the HedgeFundGirl free Substack addresses a topical aspect of the markets, ranging from breaking down an event in the headlines to deep dives into individual stocks or industries.

A premium tier will launch soon with monthly reports and ongoing updates on Ms. Barshay's favorite stocks, which draw heavily from the worlds of consumer and media, small caps, and special situations. Ms. Barshay spent more than 20 years on Wall Street, beginning her career in equity derivatives at Goldman Sachs and later working as a buy-side equity analyst at Sanford Bernstein, where she covered global consumer cyclicals and conglomerates.

Ms. Barshay spent time as an analyst at several long/short hedge funds, including Sky Zone Capital, Metropolitan Capital, Buckingham Capital, and LaGrange Capital, and as a portfolio manager at global reinsurer Swiss Re and at an ultra-high net worth family office.

In 2020, after a long career managing institutional capital in U.S. and European equities, Ms. Barshay pivoted to providing retail investors with investment advice and education, first at Empire Financial Research, and now at HedgeFundGirl.

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