Investing in What I Buy

This week I've been to Petco a couple of times, plunking down big bucks for cases of cat food -- naturally Licorice, my big kitty, has digestion that is too sensitive for Little Friskies, and he must have the expensive brands -- a new litter box, cat litter, and similar amenities that go with the joy of being owned by two spoiled kitties, spoiled birds, and two spoiled guinea pigs.

So naturally when I was searching for stocks in which to invest, one of the stocks I explored was Petco (PETC). Happily, it fit the investing criteria given in the book Rule #1 by Phil Town (Crown Books, 2006), and it seems to be performing well. Not that I would urge everyone to run out and buy Petco stock. One of the first criteria is "meaning," and if Petco has no meaning for you, if you have no pets, or if you have an issue with Petco, or someone built a Petco on top of your old Little League field and you still curse the store every time you drive by, then it's probably not the stock for you. But if you, like me, are in and out of Petco so often they've set up a special checkout counter with your name embossed in it, it's one you could add to your list of stocks to track.

It did turn out to be a good stock for me, so that now each time I trot in to buy another case of cat food or a sack of hay or more toys and catnip, I can smile. Not only does my Petco card save me a few bucks (especially now that I've graduated from P.A.L.S. to Top Dog, thanks to the amount I have to lay down each month for the household zoo), but my Petco stock earnings are also helping to offset the care and feeding of our critters.

That's a lesson I learned from Rule #1: when you're looking for investments, start with what you know. As far as stocks go, start with the things you're familiar with, the things you buy, the things you're enthused about, rather than chasing after whatever stock or sector everyone else is chasing after. By the time you get the news about gold, gold stocks, technology stocks, or whatever the latest is, the investment may already be overpriced. But if you start with companies you already know that make products you understand, you stand a better chance of making a wise long-term investment.

Belle says, "You say spoiled kitties like it's a bad thing."