Caution: rambling post with not much of a point:
Very difficult and troubling for me in dealing with the stock picks of successful investors who seem to be really comfortable and confident of their selections.
We see a number of such people on SI who through superior intellect, or superior dd, or creative research, or industry or personal contacts, or excellent common sense, or some good luck - or some combination of factors -have put together some winning stocks. And these people are acknowledged here and elsewhere for their good record.
When one of these people recommends or re-recommends a particular stock, the rest of us should pay attention. I believe that these people are generally right. Because they have been. (Of course, they could be right until they're not, until the market favors a different type of stock, the market corrects, or whatever.) I am one who will look at the jockey though - maybe I shouldn't, but I do.
I'd like to pick a specific stock to illustrate, but I don't want to personalize it here, so I'll mention a stock not discussed on this thread: TMXN. If you search for it on SI you will find at least a couple of very good stock pickers (that's imo, based on my casual observation and what other people seem to say) who've recommended this stock, who own it and still believe it has a good future. I don't know the future of the stock, but I believe these good stock pickers to be right (as they often have been), and the stock will rise (maybe after some correction, maybe just keep increasing as it has been).
IF the purpose of investing is to make money and IF TMXN is believed to be a good speculation (I hesitate to say 'investment' here on a Ben Graham thread), I suppose I ought to be a buyer because today I believe the stock will continue to move higher. (I am influenced by the guys who are sure and have good size bets that it will.)
OTOH, I can't understand much about TMXN. It's a dinky company with not much history. And if the attraction of TMXN at current price isn't clear to me, then it also seems to me many on SI who are buying it are making a leap of faith that the people recommending it will come through for them as they have in the past. And that people buying now or recently will be able to make money from their buying TMXN, and that is the whole purpose. Or is it?
I try to look at investing as a process. To me it's not just a matter of making money in one stock or a lot of money in a couple of stocks this year or making a big score and retiring. I see investing as a long-term process where, if I can get the process right (or at least right for me), then the results will inevitably (hopefully) flow. And so I look for repeatable things that I can do. If I don't understand a company and yet I purchase a stock because I believe in the jockey, then I've trapped myself. I've made that part of my process, and I'm dependent on a particular jockey or several of them. And if he or she or they go away, the good results stop too. So even though I get teased about never seeing a stock I don't like, if I don't find some ruling reason about the company prospects or I can't put the stock into one of the many categories I use, stocks like TMXN will be moving up without me.
I do have some of the stocks that have been strongly recommended on SI. Where that's a problem for me is the sell decision. I have a tendency to listen to the strong believers and hold too long. Given my lack of detailed knowledge about any particular company, that sometimes means I'm among the last to know to sell a stock.
Ah cripes, these may just be my issues. -g-
We know how difficult it is to get three people here to buy the same stock. So maybe there are just a lot of curmudgeons on the thread. Lol! Guys not easily swayed by anybody else's opinions, no matter how good the jockey looks.
That's probably all to the good. :>)
Paul Senior |
