26 reasons your stock picks suck

Thanks for bringing this to our attention Tom. Very informative.

Tom
Your argument is not worth a crap... The real issue is shareholder activity. What are we doing ? noting but proxy voting, suggestions, etc.? Take GM, we can kick UAW out so to take back profits and dividennds lost to the UAW Black Hole Pension Plan!!! Aluminium is still cheap and we still like it even though copper and moly and nickel went skyrocketing !! That was why Alcoa started after Alcan and all hell broke loose. There is so many good stocks that went begging yet we kept on buying old stale stocks like Coke, McDonalds, GE, Altira, Pfizer etc. Mutual fund managers dont know how to run funds at all. You cant pin a blame on anyone as Lousi Rukeyser always like to say Will the real Wall Street Please Stand Up??. All is required is simply shareholder activity or so called hustling. Shareholders can literally take over management functions as seen fit as well as kicking overpaid rascal workers out like UAW if needed. We have to draw a bold thick black line between Wall Street and Main Street. Some stocks can be found at Main Street and others in Wall Street. Just avoid Main Street stocks where workers and managements are basically thinking for themselves at great expenses on shareholders' own behalf. Shareholders can decide . Obey the shareholders@!!

These are the reasons why I sit down and take a hard look at my holdings and how my portfolio has done IN AGGREGATE once a year. I may check the ticker several times a day (because I like to), and I may purchase stocks and mutual funds in small amounts several times a month (that's the way it goes with payroll deductions and money coming in 3 times a month), but I've found that graphing my total portfolio value once a month and taking a more critical look once a year keeps me from getting too stupid or too arrogant.

That said, I don't think my stock picks suck--at least taken as a whole. I have a couple of "losers" I refuse to ditch for one reason or another: One pays a great dividend, another is just appeals to me too much and I didn't spend much on it anyways, another seems poised to take off, and yet another is held in reserve to generate a capital loss should I need one at the end of the year for tax purposes.

Overall, though, my fund and stock picks have beaten the market, and I'm satisfied with my portfolio's performance. But then, I always have been satisfied with my portfolio's performance, a portfolio I chose myself from the start. I'll admit I probably could have done better, but as long as I'm satisfied, why sweat it?

The biggest reason why your stock picks suck? The trend towards complexity. When I first became a broker I'll admit that I was taken in by these modern day witch doctors with their tops and bottoms and candles and Fibronacci numbers and what-not. I love the cup with handle. love it that is if you can actually find it. The good folks at Investors Business Daily like to anthropromorphisize stocks and devise these little parables about stocks being over extended from their bases. Kids, the stock goes up because the earnings increase. It may go up for a while but if the earnings don't follow in-kind gravity takes over....but I digress.

The odd thing about the Trend Towards Complexity is that the smarter you are the more likely it is you'll buy into the explanation. Witness LTCM and the hedge funds. I love you people and I've been witness as you work your magic talking about going short in one arena and going long in another and managing to get 2 and 20 from the individuals entrusted with caring for the pensions of teachers. Hint, if your pension fund manager has to go to another person for advice he/she or it should be replaced. Good work if you can get it though.

The only number you can trust anymore? Share volume. If it is increasing in either direction don't argue just move. In the mean time, watch those macro trends and make micro movements. If demand for X rises than the suppliers of the parts/resources that comprise X will rise also. Picking stocks really isn't that difficult. You needn't short or buy options or invest outside of the US for good returns. Go long, margin a little, read the paper identify a trend and enjoy the ride. The next trend for the coming decade: Health care. All of the boomers will want new knees.

Beltway Greg

You are right tom they really suck!!


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