When it comes to trading stocks, all investors have their own method or list of criteria they must go through before deciding whether or not to invest in the particular company. It may be analyzing charts, looking at the books, or a mixture of both, but it is clear that almost everybody has their own unique style and time frame for which they think they might see some return.
Bring on the analyst, blogs, business channels
With so many sources, different “potential stock picks”are being thrown around all the time, and it can become overwhelming; moreover, each analyst (pro or not) will try to back up their picks by explaining the method they used. Like I stated earlier everybody looks at something particular, and you shouldn’t be quick to judge if a method doesn’t match yours.
Lot of times I come across posts on financial sites/blogs where the comments are filled with automatic negative reactions to the author’s choices (luckily not on mine so far). For example, the writer might of chose stock x because he likes the new volume after coming off a 52 week low and a commentator disagrees and continues to state that stock x doesn’t work because he doesn’t like stocks at these levels. Some people come to the conclusion that if their methods are not being used, then the pick is wrong and will never work. What is even more annoying is that these comments can belittle the original stock picker. Now granted all stocks are not going to be the right choice for everybody, but nobody can really state whether or not someone’s method is actually better then another.
Use every experience as a learning tool
So when I see people using different methods then me I use it has an opportunity to learn and enhance my own skills. Lot of times the most successful people are the ones that try to learn from the game while taking part in it at the same time. Usually if I am interested in the stock and the way the analyst backed it up, then I will continue to analyze that stock through my guidelines and then compare. Eventually I will make a decision on whether or not to pursue the trade. You never know when the next big trade is coming.
One example of this can be seen with Jim Cramer on his show Mad Money. He will probably spit out over a dozen stocks per show and like robots many will probably instantly go and set a ticket order for some of those stocks, but on occasion he has been known to be wrong and it happens to everybody. Over time I have tracked some of his stocks, studied the method he uses, compared his picks with my method, and then singled out stocks that I think would be beneficial for me.
So next time you come across a “potential stock pick” evaluate the reasoning behind that, then try to compare those results with your style. If you are still unsure then track the stock and maybe a couple others chosen by the picker, and then track them to see if they are successful or not because you never really know how successful someone is unless you keep track of their gains/losses. Who knows maybe you will have a new method of your own at the end of the day.