Another Moneymaking Tip
My last post explained about the dividend yield and why and how you should pay attention to companies that have it, grow it, and pay it consistently. This focus has been a consistent moneymaker in my trades over the last few years.
The other thing that I want to recommend to anyone who buys, sells, or thinks about stocks is much simpler. Find the Lehman Bros. analysis of the stock and, more importantly, the sector analysis. Read them. Then, read them again. These guys are wrong a lot in their predictions, but I don't care about that. Even when they're wrong they're extremely educational. I'd rather read ten wrong picks from Lehman analysts than ten right picks from one of these computer-generated "analysis" vendors.
Knowing what the Street is thinking about these companies and these sectors - how to value them, potential pitfalls that might not be immediately obvious, publically available statistics on inventories and markets relevant to the sector - it's just priceless. And if you belong to a subscribing brokerage house (like Fidelity) it's probably all free for you on the web. (Hint: Lehman doesn't like being evaluated by Starmine. Look for the "Non-participating" company that has a PDF available to view - that's going to be the Lehman report.)