On Stock Picks and Hotlists
One of the great parts about writing the blog is the great feedback I get from readers. Quite often readers send me "great" sites for stock picks or someone’s trade log to review. I am impressed as to how many there are out there currently. In any event, given the nature of this blog and the feedpicks site I created, I wanted to comment on one thing. Many beginner, or maybe more advanced readers, often confuse something very important: stocks that open up and stocks that trade up. What I mean is when analyzing our (the bloggers) picks, pay careful attention to the timing. For example, if I call symbol XYZ for Monday, my "pick" is only as good as the distance traveled from the open, not the day’s total gain (which may include a gap up or down at the open). If XYZ closed yesterday at $1 and I call it overnight, opens at $1.50 and closes at $1.40. The day’s total gain is 40% but the tradeable gain is -7% (saying buy at open, sell atclose). Sounds simple, but in the past week three people have emailed me about the "amazing" calls of some bloggers and forum members. Kudos to many of them, but for others, it’s not hard to call a hotlist stock if someone blew away earnings the night before. I’m less trying to call anyone out (not- no links) than trying to educate a certain part of my readership. Just something to keep on your mind.
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