First buy a coconut that has clean, fresh looking "hair" or shell pieces on it. Then look at the "eyes", if there is mold formed or even a white or moldy appearance better not buy it. Finally shake it to see if there is liquid inside. A fresh coconut should have a good quantity of water. If the water when it is opened tastes fermented or sour, or the white meat inside is soft rather than firm, the coconut is spoiled.
Not to open it! First punch holes in two of the "eyes" with an ice pick and drain out the water. This water is good to drink or can be used in some recipes such as coconut ice cream. Bake the coconut after the water is drained in a low oven (250 degrees F.) for about 20 minutes or until it breaks open. Or if it is terribly hot and you do not wish to light the oven, it can be heated over a burner (it will however shed some hair and is messy).
You can also break it very easily by hitting with a small hammer. Tap it fairly hard, making a circle as you tap around the coconut. When you have gone around it, if you have been hitting hard enough, the coconut will break right in half. The shells are interesting to use for serving tropical fruit salad or coconut ice cream. If the coconut is baked or heated, it is easier to remove the white meat from the shell and perhaps a little easier to skin off the thin brown skin. I use a potato peeler to shave off this skin.
Fresh coconut can be shredded in the blender or hand grated. I like my salad disk grater best as the pieces are put into the bowl at the top and there is no danger of grating my fingers. Fresh coconut can be frozen or dried and kept for a long time. It can be tinted with cake colors and looks wonderful on cakes and puddings. Or it can be toasted a golden color in the oven. If is coarse grated, it can be used for nuts. It sticks on a cake better with boiled or seven minute frosting.
Coconut milk made by grating coconut in the blender with warm water and then squeezing through a cloth takes the place of cream in many recipes. It is especially good in chicken, meat, and fish dishes.