(Comment/Analysis) As Paul Newman (Fast-Eddie-Felson) said to Jackie Gleason (Minnesota Fats) in "The Hustler"..."OK, fat man, here we go...fast and loose."
We've got only two reasons to buy a stock. First for the dividend or yield. At an average of 1.6% not many folks are playing this game. They're going for door #2...buying a stock and hoping they can sell it to some schlemeil for more than they paid for it...a few minutes, hours, days, weeks, months
later. Despite all the analysis, analyst recommendations, upgrades, downgrades, sidegrades good "stories" bad stories...what we've got here is the biggest casino the planet has ever seen. We're traders. The good ones make more money than they lose; the bad ones are the "pigeons", the suckers.
The Big Question; how to be a good trader? One way is, as Hal Holbrook (deep-throat in "All the President's Men") said to Robert Redford "FOLLOW THE MONEY". In the market only ONE thing can move the price of a stock higher...MORE ORDERS TO BUY THAN ORDERS TO SELL (I'm talking money here, not just the number of orders). All the analysts gushing, kvelling and "here's why you gotta buy this baby NOW" recommendations mean absolutely nothing unless they result in globs of money pouring into "Buy" orders for the stock. And hey, who knows if the analyst has a position in the stock, or his brother-in-law has a position and he's got it at higher prices and is looking to generate some buying to get himself out. Or if his firm is sitting with a bundle of the stock...or their clients as well..at higher prices? Or if they've already taken a position and are "front-running? The "ethics" along that street called Wall are not always gonna get 'em past St. Peter and through the Pearly Gates. But there are some who play it "straight". When you find 'em, when they tell you up front they've got a position, make a note of it.
We (traders) are sitting at a poker table every day with a bunch of sharpies...looking to take our money. So we gotta be sharper than they are. (Capt. Tomato just took off, gotta run...more later. (Lee) |
