Google (NASDAQ: GOOG) this, Apple Inc (NASDAQ: AAPL) that, will Lehman Brothers Holdings (NYSE: LEH) follow Bear Stearns (NYSE: BSC) -- bleh, all hotly debated, all random market noise! Noise that you must learn to ignore.The financial media -- envious of the fat profits generated by such entertainment-based businesses as World Wrestling Entertainment Inc (NYSE: WWE), Las Vegas Sands Corp. (NYSE: LVS) and Wynn Resorts (NASDAQ: WYNN) -- has brainwashed you into believing that in order to make money in the stock market, you must keep up to date with every single headline and development in the business world. Hogwash!
I have no problem with financial entertainment, but I do take issue with all these media outlets making their content out to be useful to investors. I've repeatedly echoed this theme in articles like this and I don't expect this industry to change anytime soon, but I am going to keep preaching so you will better understand how low your chances of success are if you bet on the most popular -- hence the most efficient -- topics du jour. Unless you are George Soros or Warren Buffett or a few other wealthy elderly men, there is always somebody better informed and more intelligent than you are. Hence, you are always at a disadvantage.
To combat this, I stick to the much derided -- and highly inefficient -- world of microcaps and smallcaps where my competition is just a bunch of manipulators and suckers; meaning, I often have the upper hand.
And if that niche is too volatile for you -- as it is for those of you with heart conditions -- I suggest focusing on stocks breaking out of their trading ranges, or those making new highs. Yesterday, I highlighted 20 stocks, only five of which I thought looked worthwhile and today let's add three more stocks to that list. United State Steel Corporation (NYSE: X), Weatherford International (NYSE: WFT) and Illumina Inc (NASDAQ: ILMN), all of which are breaking out to new highs. If you keep your stop losses tight with charts like those, it's tough to go wrong.
Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund
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Reader Comments (Page 1 of 1)
4-01-2008 @ 6:15PM
Beltway Greg said...
Yeah Tim I bet you ignored Apple all the way to $200 last year and you'll probably do the same this year. Keep your stop losses tight? Put your money in GS and Apple and go to the beach or you can sit in front of the computer screen, risk a nervous breakdown and give most of your money back to Uncle Sam.
Beltway Greg
"Hey doesn't that dude from Babson owe me an IPhone?
4-01-2008 @ 6:29PM
Beltway Greg said...
Here's the deal Tim. You might be a nice guy and all but your approach to investing is going to get most people killed unless of course you're willing to instantly message people when the exact moment to trade arrives and also supply them with the correct allocations based on the risk not yesterday but at that moment. Until then you're simply advertising your blog site and providing entertainment.
Beltway Greg