Price Targets
Every day in any financial publication you will find the Wall Street mavens giving their predictions on many stocks. It was issued here and should go there. It is now undervalued and is worth that much more. Really?
Has anyone gone back to check out these predictions? I haven't, but I know that as a stock increases in price these same geniuses continue to raise their target prices. How they arrive at these mysterious numbers is beyond me. When their price target is reached do they ever tell you to sell? Not that I can recall. And if it starts down do you ever hear from them again. Not hardly. They are now predicting some other stock.
All this is done in loud voices and big headlines. There are many reasons given as to why XYZ will go to $230. And maybe it will, but when it gets there (if it does) what do I do? Not one of the Maul Street crowd ever tells you to sell.
Price targets are like doing research. Both are worthless as far as making money in the stock market is concerned.
Here is the secret of how to make money in one of those hot-shot stocks. First don't pay any attention to projected price by any broker. They don't know. All that talk is window dressing to get you to buy. Remember there is someone willing to sell to you at that price.
And second you should be selling out near the top (not at the top). It is not that difficult to do, but you won't get this from your broker. Since no one knows where the top is then you have to let the market action tell you when to take your profit. How? With a trailing stop loss order.
Let's say this hummer took off from $14 and it is now $35. WOW! Should you buy it? If the public relations is new and you want to take a chance then buy it, but have your exit strategy in place. The media blitz for this stock says it will go to $90 and sure enough it does, but it keeps on going. It went right through its target and is now in outer space above $150 and still has rocket fuel to burn. Your trailing stop is now somewhere about $125 to $135. This beauty tops at $255 and plays around there for several weeks when it starts down and hits your stop at about $230. Aren't you glad you didn't sell at $90?
The above stock will be nameless here, but I did see this happen and it finally ended down at $2.50. That is why buy and hold should not be in your lexicon if you are an investor.
Price targets are there for the gullible investors. Learn to use this Wall Street trick to your advantage by using a trailing stop.
Copyright 2005
Al Thomas' best selling book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter to receive his market letter for 3 months at www.mutualfundmagic.com to discover why he's the man that Wall Street does not want you to know
More Resources
Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exitingMore Stocks & Mutual Funds Information:
Related Articles
Enronization
Even if you don't own any of their stock or any stock at all you will want to read this.What Enron corporate officers did with their accounting firm is nothing new.
Risk Control
Everything you invest in has risk so you want to do your research before you put your money on the line.For example, when McDonald's opens a new restaurant (please, don't call it a hamburger joint) they will investigate as many of the relevant facts as possible.
My Stock - Right or Wrong
We all know the expression, "My country, right or wrong", but have you ever thought about the stocks or mutual fund you own and said to yourself, "My stock - right or wrong" and held on to your position even as you saw your hard-earned money disappearing?This is the Buy N Hold strategy and, in case you haven't noticed, lost from 40% to 60% and more of investors' money from 2000 to 2003. Fortunately, for the past year stock markets around the world have gone up and folks have recovered about 25% to 30% from those low numbers.
The POWER of a Proven Stock Investment Plan
When you invest in the stock market for ever-increasing cash dividend income, verses trying to make a buck in the stock market, your mindset will change. There will no longer be a fear of losing money in the stock market.
Municipal Bonds
Because there are so many stocks that are NOT paying dividends and also going down people are looking for a safe investment that will pay a decent return and also won't lose money. Slowly folks are beginning to think about bonds of which there are all kinds.
Mutual Funds are Dead
You may have wondered why your mutual funds have been going down for the past 2 years. The answer is very simple, but not one you will hear from Wall Street as they want you to send money.
Long-Term Investment In Todays Market?
The stock market is very unstable at this time going up and down while interest rates are so low you want to be a borrower and not a lender. Would you like some suggestions on how can you get the most out of low interest rates while being assured your principal will not disappear while you are trying to make some money? Of course, there is always the danger of borrowing the money and then spending it just because it is there.
Exchange Traded Funds Primer
Exchange Traded Funds (ETFs) are a group of passive index funds that trade on an exchange like an individual stock. At the time of writing there are 162 ETFs with $220 billion in assets under management trading on U.
Some Good News for A Change
Before we get into all the good news out there, let us first take a look at what the term "news" really means. By definition, the term "news" means the exception to the norm.
Box Of Chocolates
Ever have one of those sample boxes of candy? Each little piece is beautifully wrapped in colorful foil or decorated with an interesting design. Taste just one.
Dont Fight The Fed
One of the great truisms of Wall Street is "Don't fight the Fed". For the long term investors this has resulted in greater profits.
Advantages and Disadvantages of Mutual Funds
Outlined below are some of the advantages and disadvantages of mutual funds. Every investment has advantages and disadvantages.
Economists
In today's volatile and confusing stock markets everyone is searching for a guru who knows which way the market is going and when. Ask any economist and he will have an answer.
Smart Day Trading Strategies to Help You Make Money in the Stock Market
Stock trading can be a very profitable activity. You can make big amounts of cash in a short period of time.
Humpty Dumpty the Stock Market Falls Down
Humpty Dumpty had a great fall and all the King's horsemen could not put Humpty Dumpty back together again.The Stock Market has had a great fall and all the brokers, CEOs, analysts and politicians have not been able to get it back up again.
Wal-Mart: Discount Store, Discounted Stock?
As GuruFocus updates the stock buys and sells of gurus, Wal-Mart (WMT), the discount retail giant, stands out as the stock with a high ValueRank (7 out of 10). Just recently, Clipper Fund's James Gipson and T.
Kick The Tires
Before you buy another car you walk around the lot, kick the tires, slam the doors and look at the mileage indicator. That's an odometer.
The Stock Market is a Roller Coaster: Prepare for the Ups and Downs
IT'S REMINISCENT OF THE OLD children's tale about an old Chinese farmer who tells his friends his story, and they enjoin with "That's good" or "That's bad" on alternating lines:Farmer: My horse ran away.Friends: That's bad.
Top 25 Growth Funds
On Monday, November 25, 2000 Investor's Business Daily listed on page B1 the Top 25 Growth Mutual Funds for the last 36 months along with their performance for the year 2000 to date. Only four showed a profit this year of 21% and the other three had increases of 12%, 5%, and 5%.
When Should I Sell?
People are always asking me when should I sell my stock or mutual funds?There are some relatively easy answers to this. In fact, so simple that you won't believe them, but they are things I have learned over the past 30 years as a professional trader on the floor of the commodity exchange in Chicago.