How Did I Find Growth Stocks
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New Oriental (EDU, based in Beijing): every Chinese student came to US for study knows that, no need to say anymore.
Home Inns (Rujia, HMIN, based in Shanghai): my friend in my hometown told me about this in summer 2004. He is a small business owner and he thinks that Rujia is clean and economical. He would stay there when he visits Shanghai as long as he does not see his foreign clients. I believe business travallers make up more than 50% of Rujia’s business.
Mindray (MR, based in Shenzhen): found out shortly after its IPO. I always liked medical device makers, both from investment and health/science point of view. The barrier of entry is high: unlike English (or IT) training, you put ad on newspaper, hire some English teacher and find students and a classroom, you are good to go. For medical device, you will need R&D talents (hint: graduates from HUST), good sales and customer support, all of which you can not get overnight. The risk: lawsuits, regulatory procedures.
Crocs (CROX, based in Denver): heard “the shoes are wildly popular” from a friend works in college. Started looking more during holiday seasons 2006.
Heelys (HLYS, based in Dallas): read its IPO news from WSJ (on flight from California to St. Louis, early Dec 2006). Did more research on the web and stores afterwards.
In summary: talking to friends; IPO; newspaper (Internet)