This post contains affiliate links, internal links and adds by Google Adsense. All opinions are my own. I do not own the position mentioned in this post.

---

I began method investing shortly after reading One Up On Wall Street by Peter Lynch. 

He took the knowledge I gained from The Intelligent Investor and added on to the foundation. 

From that point on I would no longer use just a numbers approach to analyze stocks. My research went to an entirely new level:

I would look at numbers, check out the website, read the reports, listen to the conference calls, buy the products (if possible), sign up for the email newsletters, test the level of customer service and even analyze what other people were saying about the product in person and on social media. I was a method investor.

What is Method Investing

In short, method investing is defined as an obsessive personal interest in stock positions to the point where the stockholder identifies as the business owner. The shareholder will obsessively research and take on an ownership perspective as if they work for the company. They go beyond the number that goes up and down on a chart—the shareholder will identify as a business owner and contributor to the business.

While most cases of method investing are mild cases, such as a Pepsi Investor requiring a bag of Lays per day, there are more extreme cases in which the shareholder believes they are the manager of every retail location they walk into.

But overall, the typical method investor will stick to analyzing the in-store displays, online advertising, and will search hashtags to see what is being said about the company online.

In addition, a method investor would only buy companies that create products that they themselves are obsessed with.

To better illustrate what I mean, I will select Lay’s Regular Potato Chips as an example. To put it bluntly, I am f@%king obsessed with Lays Regular chips! Therefore, I should own shares of Pepsi because they own the Lay’s brand.

This is important to a method investor because they will be able to notice any changes to the marketing or quality of the product over time. 

Admittedly, Method Investing is a term I made up based on method acting.

Method acting is defined as…

“a technique of acting in which an actor aspires to complete emotional identification with the part.”

I’ve always thought it was cool and respectable for creatives and actors to take their work that seriously.

Of course, one of the most famous method actors was Heath Ledger, who played The Joker in The Dark Knight.

How to become a Method Investor

• Only buy stocks in industries you understand.

• Buy the stock’s products all the time.

• Go beyond the numbers. Watch YouTube videos, reach comments online and ask people about their opinion on the company.

• Stay alert of the company’s presence in every setting: while travelling, shopping or interacting.

• Work for companies that you own shares in.

Concluding Thoughts

I own 13 stocks in total and I recently realized that I do have a connection with all of them in some form.

I have either worked there or was a huge fan of their product or service at one point. The main thing is that I know a lot about each of them.

I also realized that I’m more comfortable with market corrections when I own shares in companies that I work for or have worked for. I’m such a method investor I’ll even work for the company to understand it better. Ha!

Moreover, I believe there are many benefits to taking on a method investing approach (the approach I’m trying to coin lol).

At least, there aren’t that many downsides to obsessing over research and sticking to core competencies.