Saturday, January 22, 2011

So what are you getting when you pay for high priced stock pickers?


When analysts say 'sell,' it is time to buy, data show

Stocks unpopular with Wall Street up 165% since March 2009

January 16, 2011 6:01 am ET

Following the advice of equity analysts may be perilous to your profits

Although companies in the S&P 500 that analysts loved the most saw their stocks rise 73% on average since the benchmark for U.S. equity started to recover in March 2009, those with the fewest “buy” recommendations gained 165%, according to data compiled by Bloomberg.

Don Wordell, a fund manager at RidgeWorth Capital Management Inc., said that equities that Wall Street firms rate lowest are more likely to beat the market.

“When you have a stock that has 15 analysts covering it and it has 15 "buys,' I can't imagine it has much outperformance left,” said Mr. Wordell, whose $1.64 billion RidgeWorth Mid-Cap Value Equity Fund topped 98% of its peers over the past five years. “You've got a stock that has 15 "sells' on it, you're set up there to have some strong outperformance.”





Sunday, January 16, 2011

3 minutes with Warren Buffett


A good friend of mine will often say to me: "Mike, do yourself a favor" then proceed with advice or a recommendation. I will do the same for my readers. Do yourself a favor and spend less than 3 minutes watching the following 2 YouTube clips of of Warren Buffett giving his advice to the average investor:

1. Stay out of debt
2. Save regularly
3. Buy INDEX funds (for more info on index funds explore my past blogs)
4. Don't try and time the market. We lose a lot of money listening to the financial press and then buying and selling at the wrong time.


http://www.youtube.com/watch?v=rEX81lGhMwM&feature=related

This is advice that I have promoted and expanded on in previous blog posts.

My mission is to educate and spread sound financial learning in all of my writing - an effort to explain and expand on the ideas of Warren and other financial thinkers.