Beating the stock market
http://blogs.forbes.com/digitalrules/2008/04/two-ways-to-bea.html
This recent blog post by Forbes columnist Rich Karlgaard started me thinking about may methods and plans to generate better than average returns. I like reading Rich because he is a perennial bull/optimist on stocks. Most of the current financial info in the web is so much gloom and doom. Reading the comments to articles on any of the financial sites show a large number of readers who are so pessimistic you wonder why they are even reading investment articles.
I am trying, and writing about it here, to find stocks I believe will out perform the market or competitive investments. Why buy individual stocks unless that is your goal? The article shows 2 investors whose styles have beaten the markets and I work at continuing to define what I am looking for. My style is closer to John Buckingham than Ken Fisher, though I always enjoy reading what Ken has written.
To put my investment style/goals in as few words a possible, I look for smaller cap stocks ($500 million to $2 billion) that have a unique story, growth or turnaround that I think the market is undervaluing. These smaller companies generally do not have much analyst following (1 to 3 is good) and my own judgement about the company may be more accurate.
I collect as much information as I can through the Internet and I really like to listen to quarterly conference calls. I think the calls give you a chance to make a judgement about the abilities of the management team. Every company is trying to grow their business and profits and I like to hear managements thoughts on their progress. After a few quarters you can see if the company is following through on their plans or making excuses about whatever is holding them back.
Finally, I am currently in the stage of accumulating stock. If I find a company I like I may watch it for a while to see if what I think pans out or maybe to price gets hammered along with the rest of the market and i can pick up shares at lower prices.
Filed Under Growth, Investing BlogsComments
Got something to say?
-
Amazon gift card link
Subscriptions
RSS
