Use access key #2 to skip to page content.

Jobe01 (96.39)

Lemmings

Recs

9

August 10, 2009 – Comments (7) | RELATED TICKERS: CRUS , COGO , VISN

We know what they are, and we know what they do.  Following up on a comment I made in my first blog since I've been a member, I want to talk of Lemmings.  Every morning when I awake, I turn on CNBC or Bloomberg.  What I find interesting, but not suprising, is how analysts, guest speakers, etc...tend to move in the same direction when it comes to the market and momentum.  It's rare to hear a contrarion speak.  Usually, when they do speak, they're pooh poohed by the so-called analysts.

I've been investing for years, researching stocks, companies, and the like.  I've failed miserably, and as a result have learned a very valuable lesson which now serves me well.  Do Not Follow The Pack!!  Like Lemmings, when the tide turns the analysts and others begin to head in the same direction, often fulfilling expectations, but just for a short period of time.  Too often, the tide goes back out, leaving in its wake carnage.  During those times, we don't hear much from the lemming analysts.

By advice, for what it's worth, look for the overlooked stocks.  Look for equities trading at or near cash value.  Check the debt level, confirm the stock has little or no debt.  Check the insiders, are they buying or selling?  Also, review what the insiders are saying when they release quarterly earnings.  What do they project relative to what the analysts predict.  Finally, check the charts.  Is the stock hitting new highs?  If so, you should avoid in most cases.  If the stock is bouncing off lows inspite of what appears to be good news, it's probably a good buy.  Do your research.  Take the time to understand what you're investing in.  When you pull the trigger, believe, not blindly, but because of what you've already done.  So, here's a checklist:

High Cash Value relative to market price

Little or no Debt

Insider buying with high percentage of insider ownership

High projections from inside with respect to what analysts are saying

Low share price relative to history

Low RSI when you buy

A good product/service mix

A wide range of customers

If all of these factors align correctly, you have an 80% plus chance of making $ on your investment.  I hope this helps.

Jobe

7 Comments – Post Your Own

#1) On August 10, 2009 at 10:33 AM, portefeuille (99.97) wrote:

I am sorry to say that this "checklist" is about as mainstream as it gets. I only miss the word "dividend". That is an almost perfect list to follow to become a "lemming".

So as to "I hope this helps." I am afraid it doesn't. Neither does the second last sentence. You can even have an about 90% "plus chance of making $ on your investment" if you do the random walk thing ...

 

Report this comment
#2) On August 10, 2009 at 11:27 AM, russiangambit (99.04) wrote:

> I am sorry to say that this "checklist" is about as mainstream as it gets. I only miss the word "dividend". That is an almost perfect list to follow to become a "lemming".

I disagree here. In the recent years, everyone is chasing momentum, what is hot. I think this is due to the ungodly number of hedge funds. If you are not a momentum player (read day-trader) to be successful you do need to find stocks that are good value but are not currently popular. One day they become popular and will go through the roof. Momentum chasers are like locust, they find one area, they make it so hot, it gets scorched and completelt destoryed, they move to another one. That is called rotation on the finacial networks.

Granted, there are other methods to make money in stock market-  trading in pairs , for example. I know portfeuille is a fan of high-beta stocks. These are good for trading in pairs.

This one is essentially a value approach, but it works when done right and with patience.

As for financial networks all reporting the same things, they are probably catering to their viewers, they  probably only invite people who are currently considered right, that is why they are all saying the same thing. Though, there is almost no discussion in financial prime time, only shouting matches. I personally like Tom Keen and Pim Fox on Bloomberg, they have long programs where they actually discuss things. Fox Business is also OK because it tends to be more contrarian.

Report this comment
#3) On August 10, 2009 at 11:38 AM, Jobe01 (96.39) wrote:

Thanks for the comments, both in support and not.  Investing is always worthy of discussion, and one strategy may not be suitable for everyone.  I've learned the hard way to take a value approach, and to be patient, and to follow TA.  Lump all of that together and you'll be correct much more often than not.  As far as the comment concerning the 'random walk' post, my post concerning a checklist has very little if anything to do with that post.  I see little relevance between the two. 

One thing with regard to the random walk post, I'm a believer in my recommendations on CAPS, as I have a position in almost everyone of the investments I've recommended, going long this morning on Crus at 5.05.  Good luck to all, and thanks for all the comments.

Jobe

Report this comment
#4) On August 10, 2009 at 12:45 PM, portefeuille (99.97) wrote:

Usually my "calls" are based on "value investing" aspects, even the biotech ones. Not that helpful is warning not to invest in low cash, high debt stocks or to focus on dividends or insider buying. That by itself is usually not good advice since it oversimplifies things and makes you not choose some of the "best" stocks. It is also not always a bad idea to try to "catch a falling knife" or to "throw good money after bad".

 

Report this comment
#5) On August 10, 2009 at 12:48 PM, portefeuille (99.97) wrote:

As far as the comment concerning the 'random walk' post, my post concerning a checklist has very little if anything to do with that post.  I see little relevance between the two.

The connection is your claim "If all of these factors align correctly, you have an 80% plus chance of making $ on your investment."

If this is not simply wrong then it is since you lose with the 20% losers about as much as you win with the 80% winners, just as bigpeach explains in the post I mentioned.

Report this comment
#6) On August 10, 2009 at 2:28 PM, Jobe01 (96.39) wrote:

Thanks for your continued response Portefeuille.  I'm of the opinion that you enjoy the debate.  My success speaks for itself.  I'll continue my strategy, which has worked for sometime now, and will not follow advice which encourages me to 'follow the crowd', unless of course, my research so dictates.  Good luck to you in this unpredicatable market.

 

Jobe

Report this comment
#7) On August 10, 2009 at 2:34 PM, portefeuille (99.97) wrote:

I'm of the opinion that you enjoy the debate.

Which debate?

 

Report this comment

Featured Broker Partners