The second part of your question is basically how to find hidden value.
My answer to that is become an expert or monetize an already existing expertise.
I like to tinker on 1980s Mercedes cars. After a few years of fixing I know what breaks, why, when and how to repair. This info isn’t always widely distributed. I can leverage this into trading by flipping and refurbing junkyard parts. Eventually the market figures it out. For instance if I don’t go to the junkyard on the first day of a new arrival alert the car is picked clean - especially of window regulators.
Do your own research. You likely have know some things others don’t know. Try to think of how to trade on this info. So much of the world works this way.
I look back on my most successful stock trades. They’re in auto parts distributors, tech, industrials. Things I’ve learned the ins and out of. All along I sit around asking myself “how can I make money off of this?”
A funny example was pirating sat TV back in the aughts. I loved tinkering with LNBs and TMS320 based sat tv codecs so I could rip off Dish. Eventually they slammed the door quietly on the hacker community and their subscription rate soared. They hid the piracy issue from the shareholders for years because it was just so bad. I remember driving to my favorite dive restaurant in East LA one afternoon and checking out all the DIY Dish installs on the rooftops. 100% pirate. One day they shut it all down. They even ran ads only receivable by the pirate HW “where is your dish? Don’t worry you can get it back for the low introductory price of $19.99. You’re not in trouble and we value you as a customer.” Subs soared over the next two quarters. And I was right there with my trade waiting for it. It was huge but the CEO played it down for selfish reasons. “We’ve made some minor tweaks in our ongoing piracy issue.” Nerds got jailed over this. It was huge in the hacker community. Basically Dish offered a multimillion dollar deal or jail to the lead hacker and he betrayed everyone else. He not only turned in his nerd friends he told the chip manufacturer how to bury the encryption HW so deep in their microchip that only a state funded intelligence agency could dig it out. An entire set top box industry collapsed overnight. Knowing something that other people don’t know isn’t reading it on Bloomberg. You need to really find out something.
There were a bunch of short junkies who dig in trash cans. There’s people counting cars in parking lots. There’s people who read job reqs and count listing statistics. Companies lie all the time but they will tell the truth if they are looking for a particular kind of candidate. It tells you a lot of what they’re tooling up for. Speaking of that I go to a lot of trade shows and ask what is moving. Who is buying it. That tells you a lot. About the vendors the clients the commodities. Cocky sales guys are always quick to tell you why they’re kicking the competition’s ass. You just have to shine them on and they start bragging.
A few years ago I was seeing Bitcoin mining operations getting disassembled. Guess what got auctioned off first on their mining rigs? There was a trade in there. You just had to know what you were looking at.
I know it sounds a lot harder than reading “what should I do with $10,000” in WSJ. Yeah. That’s why most people suck at this game. They use priced in information because they’re dumb and lazy. They eventually pay up in one way or another. The less you know the more you gamble.
On a positive note opportunities knock all the time in this big society of ours. Deals are flying by every day. I just need to reach up every now and then and grab one.