Jeff, those stocks are down a combined 44% after 5 years
Well, the lesson there is very simple: don't hold any of Fortune's picks for five years. <g>
Seriously though, from looking at Fortune's list I might be able to understand the magazine overlooking the boom in commodities so far this decade, and I somewhat understand their overlooking growth in China but how they overlooked growth in internet commerce is beyond me. I would have thought that would have been a given for any stock picker's list five years ago. For the record, I think it ought to be seriously considered for anybody's picking for at least the next five years as well.
Today I was reading a travel magazine that contained an old quote from John Steinbeck - "A journey is like a marriage; the certain way to be wrong is to think you can control it." While there's a lot of philosophical truth to that thought, if one wants to apply that thought to the "journey" of watching one's stock trade progress, a major difference is that the trader doesn't have to have a "marriage" with the stock, and he can fortunately "control" it with stops or predefined exit strategies. Of course, an exit strategy discussion might imply a lack of confidence in one's picks, and therefore we don't see much mention them in many writer's annual "top ten pick" list.
I do the same thing that FLACK does; whenever I read about some publication's or columnist's stock picks (which are almost always based on fundamental analysis) I pull up a daily and a weekly chart and see if I think the pick makes sense for me. Since my knowledge of technicals is much greater than my knowledge of fundamentals, it's easy for me to let someone else do "the heavy lifting" as FLACK phrased it. Then I determine if this stock has a place in my portfolio, based on TA but looked at through a thin veil of FA.
I'd have to agree that some of the worst places to look for picks are widely circulated general interest magazines such as Fortune. But that doesn't preclude one from looking elsewhere, and if one wants to look at ones with more of an FA slant there are oodles of places to go, and there are quite a few that just use TA. In the link below a columnist cites his picks for 2006 based on the current technical picture (only one is a stock, but the rest are sectors for which one can buy a related ETF).http://www.thestreet.com/_htmlbtb/funds/investing/10259264.html.
One can always look to "gurus" for picks, but most have hot streaks and cold streaks like everybody else, and many of them are not trying to be good timers. Some, however, are excellent timers (either coincidentally or otherwise). On this board in 8/03 jkl77 posted an interview with Jimmy Rogers, who had made a multimillion dollar fortune on trading before age 35, and he was calling for a coming boom on copper (partially based on a demand increase from China) and he couldn't have been more prescient in his call and its timing.
And although they don't make any picks for the next decade like Fortune, one can always get some long ideas from Investor's Business Daily if one believes "the trend is your friend." Their criteria seems to result in showing strongly trending stocks; on many of their charts one can draw a diagonal trendline from the lower left up to the upper right of the chart.
My biggest problem with anybody's pick, whether it's based on TA, FA, or a combination, is that almost nobody lists an exit strategy, no matter how vaguely or loosely one is making it. For me, an exit strategy is as important as an entry, and it's one that the stock pickers should make note of as well. If the picker is implying that he know when to hold 'em he should complete the idea by giving us a thought of how he knows when to fold 'em. |
