Doing Your Homework
The further you stray from stocks and businesses you un-derstand, the more likely you are gambling rather than investing.
—RALPH WANGER, A Zebra in Lion Country
Homework is such a negative word. We hated homework in school from day one. I mean, who really wants to come home from their day job to work on stock research? Furthermore, what edge is a little homework going to give you over people who do this full time?
The real work is in cutting losers and in riding winners. Remember, if you are not committed to developing investment discipline, all the homework in the world will not give you an edge. You will have your winners, but your losers will absolutely crush you. Once you commit to a strategy that fits your risk profile, the most important thing you can do is use the Web and basic Web tools to pull information—and then organize that information in a way that gives you what you need with the least amount of daily effort.
Failure Happens—But Write-offs Are Overrated
I love investing and want a long career. I also like to swing the bat all the time. I don’t know about hitting home runs—likely from the scrawny arm genes I carry in the Lindzon family—but I sure do try to keep hitting them out of the park. And, like most home-run hitters, I know firsthand about striking out.
As the credit crunch intensified in 2008, the total breakdown of homework (due diligence) by investors, bankers, banks, and other lenders came home to roost. Millions of Americans experienced real failure from real estate transactions. When it comes to dealing with failure, I figure we can cry about it or we can get up and dust ourselves off.
America is amazing at standing back up, but painful memories stay with us. It is the main reason why new bull markets emerge in different industries than previous ones. I have failed many times, none more painful or glaring as my investment in SkyNet in 1998. During the NASDAQ bubble, when we all thought we were smart, I wanted to be a shipping magnate. I was an early investor in SkyNet, whose goal was to build a global, logistic network. It was a good idea, but what the hell did I know about shipping, logistics, and global finance? The head office was in Amsterdam, so good times were had, but write-offs are overrated!
The sad thing is that I almost pulled it off. I remember the stock going from twelve cents to eight dollars in 1999. I had not sold a share. The roll-up was cruising along. The Internet was going to make me rich! I was golfing with my buddy Tom at St. Andrews in Scotland, celebrating with money I did not yet have, when news hit the tape that SkyNet had hired a senior executive from Federal Express to take us to the next level. As I was high-fiving, golfing amid the sheep, hail, and cigar smoke, the stock top ticked. Our new CEO took us to the next level—which was zero—and fast.
This harsh lesson taught me that one must stay within one’s means—because life-changing and confidence-shaking losses can happen.
Catalysts: Piecing Together the Puzzle
At the risk of overdoing a good thing and also outing myself as a total Seinfeld fanatic, I want to use one more classic scene from the show to illustrate a point. In this episode, Jerry and Elaine are standing at a car rental counter and the woman behind the counter tells Jerry, “We have no mid-size cars available at the moment.”
Jerry replies, “I don’t understand. I made a reservation. Do you have my reservation?”
“Yes we do,” she says. “Unfortunately, we ran out of cars.”
Stunned, Jerry tells her, “But the reservation keeps the car here. That’s why you have the reservation.”
“I know why we have reservations,” she replies.
Jerry’s retort makes the point. “I don’t think you do,” he says. “If you did, I’d have a car. See, you know how to take the reservation. You just don’t know how to hold the reservation. And that’s really the most important part of the reservation—the holding. Anybody can just take them.”
Conviction and Discipline
The same applies to investing in stocks. Anybody can buy a stock, but you also have to hold the stock while it rises in order to make money. It takes confidence in your own judgment and discipline—your understanding about the company and its catalysts—in order to ride the ups and downs of a stock’s price as a trend plays out. Trend following is not for the faint of heart. My research and understanding about a company and the catalysts for growth give me the confidence to “hold the reservation.”
Conviction without discipline is a recipe for disaster. You must always have a plan and see your exit. You must have the discipline to honor your exits so that you will have the same conviction on your next go-around.
In order to complete my research, I piece together information from the Web at financial information sites, at social networking sites and other sites where I can gauge people’s involvement with products, and through a network of investors who think out loud online and whose opinions I trust.
It is important to find businesses with strong catalysts for growth. The compa-nies are already public so they can’t be undiscovered, but they can be mis-valued. The market is underestimating or overestimating the potential catalysts. To catch the big winners you must be able to gauge the company’s total oppor-tunity, the management’s ability to execute at a minimum level, and where the company or product is in its life cycle. To help me understand the opportunities, I rely on these four sources of information (besides the price itself):
1. My own experience—am I excited, disappointed, indifferent?
2. Online financial information Web sites
3. Social networking and other Web sites where I can gauge people’s involvement with products
4. A network of investors who think out loud online and whose opinions I trust.
I will delve deeper into these four sources later in the chapter. But first, below are two more examples to further explain the full process of how stocks end up in my portfolio. Their endings are not yet determined, but by the time you read this, the trends could be over. I don’t intend them to be predictive; I offer them as examples of what goes into my research, and how an investment thesis focused on a catalyst, an opportunity, a company’s ability to execute, and its life cycle all work together to help me ride out the daily noise. After I relate these stories, I will show you where to go to find the important elements.
Apple
The iPod was the first catalyst for the incredible run that Apple had beginning early in 2005, when its stock rose from around thirty dollars to two hundred in just three years. During that run, Apple’s success became less and less about the iPod and more and more about the iPhone and their stores. Apple continued to deliver at a very high level for an extended period of time. I believe the iPhone and the Apple Stores will continue to be a catalyst for the company and stock. The Apple Store near my office is in a quiet, high-end area. But anytime you walk into the store, it seemed like people had been sucked from rest of the mall into that one store. Apple got more traffic than the Häagen-Dazs, even on a typical 110-degree summer day in Phoenix.
I didn’t care what anyone was saying on TV, or even what my friends were telling me, or what the hot new Apple product might be, or complaints people had about the iPod battery or iPhone. In my judgment, Apple’s catalyst for that time and for the future was the stores. They were impressive; some had won architectural awards. All of them offered technical help and repairs. Many of them offered workshops and training. It was being said that getting hired to work in an Apple Store was harder than being accepted to Stanford.
Once I understand the catalyst for a stock’s success, I then want to discover if the company has an opportunity in front of it. I had to ask, How many stores might Apple have in the future? There was no telling, no comparison. Other makers of computers and electronic devices didn’t have their own retail stores. Best Buy as a benchmark, maybe? They had over 800 stores. But Apple was not going to sell refrigerators and dishwashers, like Best Buy. Apple was growing at its own pace, internally controlling every detail of each store opening. Best Buy was just gobbling up chains for international growth. How many Apple Stores there would be was anybody’s guess, but surely there would be many more.
Apple had lots of open field in front of it—lots of opportunity. Like a run-ning play in football, there is all this commotion with 300-pound guys banging heads. Think of the stock market like that. There is all this banging around the line of scrimmage. Then a running back gets through that line. He just busts through, and all of a sudden, if he’s a good one, he’s in the clear and only has to deal with a few obstacles. It is the same thing with stocks. Once they reach an all-time high, once they break through the line where the commotion is, good things can happen. A stock that has been banging up against a certain price for a long time suddenly breaks through and, as a result, it can rise very fast.
By September of 2007, Apple had 194 stores, including stores in the United Kingdom, Japan, Canada, and Rome. If they could get to 600 stores, then, theoretically, their sales would triple. Potentially, their stock price would also triple. Talk about running in an open field.
People who had sold the stock, or had not bought it thinking it too expensive, missed the big trend. Apple was quickly becoming the best retailer in the country. Maybe the best ever created. When I walked into a store, people were not playing with the iPods anymore. They were playing with the Apple computers. Kids were playing in the kids’ section. The Genius Bar, Apple’s reservation-only place to go for advice and technical support, was crowded.
I still owned the stock in September 2007, but not as much as I had owned six months before. It is great to catch trends early because most people won’t understand why a company is doing well—the catalyst—or what the stock might do. As the stock goes on and on, as the media gets more involved, as the price appreciates, as the end gets closer, the risk becomes higher. Whenever Apple reached a higher density of stores, people would look back and ask, Well, you grew a lot last year. What have you done for me lately? This would happen at a time when the catalyst that drove an amazing run was reaching its limit and the opportunity to open more stores was shrinking.
I wasn’t predicting that this one was over; not by a long shot. But because the price had gone up, and because they had opened more stores and they had executed flawlessly for several years in a row, there was an additional layer of risk involved. We were getting closer to the end game.
In late 2006 and 2007, there were lots of stocks hitting all-time highs and I wanted to try to find other opportunities. I wanted to diversify and add new names to my portfolio, and try to find new winners as well. I felt as confident as ever in my original story and so wasn’t selling all of my Apple stock, but I had been a net seller of the stock in 2007.
Gold, Oil and the Weak U.S. Dollar: Not Much Homework Needed
Be warned: You can actually do too much homework. If you work hard enough, you can find data that will talk you out of any stock position. The commodity trend is one where thinking and working has cost you. Following price was all you needed to do. Understanding supply-and-demand issues, lobbyists, war, pipelines, digging, have been a waste of time. Staying long and shutting up have flat-out worked. Gold and oil have been home-run trends. All the commodities and hard assets have bubbled in the last five years.
LIFETIME CHARTS OF OIL AND GOLD
It has been such an unbelievable trend that it’s hard to write about it from an unretired state. I absolutely should be retired. Insane fortunes have been made as the U.S. dollar implodes and hard assets inflate. As I write in March 2008, the price of gold is at a twenty-six-year high and oil has decisively passed one hundred dollars a barrel and new all-time highs. As a trend follower I have found this exciting, but as an investor I am curious as to how it all ends. I can’t imagine a scenario where serious financial chaos is avoidable. Betting on the chaos is cool and will be sexy talk at cocktail parties, but it will most likely be unprofitable for most traders and investors.
From the end of 2001 through May 2008, oil has risen from twenty dollars a barrel past one hundred and thirty. No consumer good can be pro-duced anywhere in the world without energy. The end-of-the-world bet is an exciting one, of course, but that is a homework investment. The smart investment has been to let the homework dudes fight it out and be the dumb trend follower.
From the end of 2001 to March 2008, The U.S. dollar has declined over 30 percent versus the dollar index (a basket of foreign currencies). The “talking heads” are looking for a scapegoat and generally blame Alan Greenspan along with a side of George Bush, Jr. I have my opinions and blog about them daily, but I will tell you that those focused on price love Alan Greenspan and Junior Bush.
You did not need to be early on gold and oil. They have accelerated the up-ward pace in 2008. You did not need to catch oil at twenty dollars and gold at three hundred back in 2003. In early 2006, after the trends had long been in place and oil and metal stocks were the rage, I penned “Oh, Canada”:
Canada is the place if you believe in Oil, Gas and Metals. If you believe, as Richard Rainwater does, in $100 plus oil and $800 gold, why not use Canadian dollars to buy those stocks. Or, just buy some Canadian bonds. It is a leveraged way to buy those investments, much better than playing the futures markets for leverage.
The Canadian dollar has been a huge winner the last 3 years, running from 62 cents to near 90 on the US dollar. Canadians can’t believe it, they don’t believe it! I like that. That means they have been buying UNHEDGED all kinds of assets in the US—forever—condos, homes, stocks, bonds. They are like deers in the headlights as their US dollar investments have declined 40–50 percent, just on the CONVERSION. That is real money.
Until US monetary policy changes, the Canadian dollar is headed HIGHER—likely past par. Canadians will bring their money home again—at the wrong time—which means not anytime soon.
Yes, the strong Canadian dollar hurts the Canadian travel industry as Americans don’t get the great deal they once did, but Canadians never wanted us there in the first place and we could care less about travel, we are interested in bonds, real estate and other hard assets. If you are inter-ested in diversifying, Canada is a rather simple way to do it.
In May of 2006, I added:
Do not ignore these trends—OIL, Gold, US Dollar, Information
The case for the disappearing US dollar is real. The case for hard assets is a good one. They are both well in motion. Even if they stop to-day and reverse, a cascade of effects has been set in motion.
I have touched on it over the months here by following the Gold trend and goofing on the strengthening Canadian dollar that even the Canadi-ans cannot believe.
NO ONE WANTS US DOLLARS. Buffett does not want them, global traders do not want them.
Big media has been negligent and done a horrible job covering this story so you need to find a better source.
I judge things based simply on price. The price of an asset tells you what’s going on. My instincts say our leaders have lost control. It is not in their best interests to tell you that. It is a big, sometimes bad world that has developed quickly the last 5 years financially and don’t be fooled—we do not have a handle.
Hedge Funds, derivatives, easy money, huge transfer of wealth, lack of leadership—IT IS A STEW that is boiling with chefs that are not fully prepared.
In May 2008, the U.S. dollar continued its horrific slide against a basket of foreign currencies. There are many reasons for the slide, but the important point for trend followers is that there has been no reason to liquidate your positions. It’s the same trade. It turned into one of those once-in-a-lifetime investments. Gold has gone from approximately $250 an ounce to $950 an ounce, and many metals and basic materials have had even bigger percentage gains.
The powers that control our money supply continue to print money. When you print money, when you print anything over and over, you end up reducing its value. Timing the eventual deflation and ripple effects are hard, but price will lead you to winning positions.
Fish Where the Fish Are!
If you are going to do homework, think bigger picture so that you are riding the biggest waves. Focusing on the minutiae is silly. Leave that to the analysts and their interns. Think big and think long term. Position yourself so that you are thinking clearly about the future. When you are researching a company, pay special attention to the size of the opportunity and whether its business model is frictionless, disruptive, or both. Frictionless means that they are easy to do business with. Ama-zon is a good example. You go to the Amazon Web site and, if you have registered, it recognizes you. You click on the products you want and they go to an electronic shopping cart. With one-click buying, the system remembers your credit card information and your shipping address, and you are done. Simple. Fast. That’s frictionless. Amazon still has to ship goods, but no two human beings need to talk in order to conduct a purchase transaction. There is very little resistance in the selling process. The data they have gathered allows them to enter new businesses easier than start-ups. They leverage one business to enter others—faster and cheaper.
The opposite of Amazon is . . . airlines.
No business could suck more and have more touch points of potential pain. It’s not frictionless, it’s “chock full o’ friction.” We have all had a bad experience traveling and hold special places of hate in our heart for certain airlines.
You want to look for disruptive companies, those that break the rules. The best example is Google. You cannot go to a store and find a Google product. Go to an Apple Store and you don’t see a Google product. Go to Best Buy: no Google product. This is the leading Internet company, and they have no shipping, no packaging, no delivery. They have the best margins since Microsoft, and that has been reflected in their booming stock price. While Microsoft had incredibly high margins for their time, Google is better. Microsoft must spend money marketing. Not Google.
When we were trying to get the Wallstrip show syndicated on YouTube, a Google company, we could not dial an 800 number and talk to the person in charge of video. But they knew how to find us. One day, somehow, Wallstrip bubbled up at Google HQ somewhere and somebody tapped somebody else on the shoulder, who then tapped somebody else on the shoulder and said, “Something’s going on at Wallstrip. Call them.” And when you get the call from Google, you take that call. Google turned things inside out: You can’t call them, but they know you. They’ve broken the rules.
Finance Pages
This is important. All of the information that I used to piece together my stories about Apple, Chipotle, and Crocs can be found free on the Internet. Knowing where to find that information can provide any investor with an important edge.
Google and Yahoo both have finance pages—www.finance.google.com and www.finance.yahoo.com. My main portfolio and stock-idea tracking site is www.mytrade.com. I was a founding investor in the company, and it was purchased in late 2007 by Investools (NASD: SWIM). At mytrade.com you can follow hundreds of stock investors and build your financial and stock start page. After you build it, each time you log on you will get a snapshot of the financial world and your portfolio as well as the ability to track all-time highs. You can build hundreds of stock lists.
I use Google Finance as well, where there is a Web page dedicated to every stock: a page for Crocs and one for Chipotle, for example. Those pages show charts that give a picture of the stock’s performance over different periods of time—ten years, one year, and so forth. Each page also contains links to the latest news about the company, and shows the stock prices for other similar compa-nies. For example, the page for Chipotle showed how Rubio’s, Wendy’s, and other restaurant chains were doing, and gave links to more information about those companies. That is how I found out how many restaurants each competitor had, which gave me a sense of Chipotle’s opportunity. There are also discussion groups where investors talk to one another about the company, and links that take me to information about who owns the stock, and who is buying or selling it. These pages are invaluable resources.
People Thinking Out Loud OnLine
I also get important information and much food for thought by reading the blogs of other investors and experts in various fields. A blog is a Web site in which the blog’s owner publishes a kind of journal that might include personal experiences, thoughts, opinions, or commentary about any number of subjects. Many bloggers write about their specialty. I, of course, read the blogs of people who write about stocks and venture capital.
The blogging world has its fair share of lunatics—myself included, I guess. But I am always in search of great thinkers and investors who have experience and are willing to share. I read the blogs of certain people whom I trust. You cannot put a value on that—a global community of trusted friends. I use my community in two ways:
First, if I am interested in a particular industry where I don’t have expertise, I keep checking in on the leading thinkers in that industry and read about the products they use and discuss, and the products they are investing their time and money in. For technology, I read www.techmeme.com, where I get a feel for the consciousness of the technology and Web world, and for the hot buttons of the day. The goal is a quick scan of technology and Web headlines, and I see what those people believe to be important. I see what the buzz is about, and what the complaints are, and what people are excited about.
Second, I want advice from people who have been successful and from people with diverse backgrounds. When those people blog they are thinking out loud. They are not looking at blogging as if they want to teach you; they are merely using their blog as a way to think. Therefore, you have a free look into their minds. There are two key people I read in the venture capital world: Fred Wilson and Brad Feld. Wilson has been a venture capitalist for almost twenty years, and is one of the most popular new media bloggers. He blogs about life in New York and about early trends in the Internet, and his Internet investing track record is second to none. His venture funds have invested in GeoCities (sold to Yahoo), TheStreet.com (NASD: TSCM), MercadoLibre (NASD: MELI), the eBay of Latin America, Etsy.com, the online marketplace for all things handmade and dozens more. Daily he posts thoughts about companies he’s looking at and technologies he feels are important. Brad Feld is also a very successful venture capitalist. He thinks out loud about technology and the Web from Boulder, Colorado, and Homer, Alaska. There are also technology and Web blogging generalists like Michael Parekh and Amit Agarwal (blogging from India), whom I read daily. Michael was a head Internet analyst with Goldman Sachs in the 1990s. All my favorite reads are on the blogroll at my blog, www.howardlindzon.com, and are organized in an easy-to-find way.
When you are getting a peek into someone else’s mind, remember that they have biases just like everybody else. They take in huge amounts of information themselves, which can be a shortcut for readers, but you must know how to read them. Either way, I believe it is always valuable to glean ideas from venture capital, Web, and technology early adopters (experts) who have had tremendous success. They have the gift of being able to spot trends a lot sooner than anybody else. They can make you money. I enjoy reading the people I have mentioned and others. It is both useful and nice to find people who stretch your knowledge base, but as you become more confident with this way of investing, you will probably read less and less. If you know what fits you, you will not need anybody to tell you. Find people who are giving you ideas from a good set of data.
Control the Flow of Information
Exploring and discovery are two of the most powerful aspects of the Internet. But the Internet can also be overwhelming. You have the ultimate power to choose your information sources. I suggest you use a feed reader, sometimes called an “aggregator,” to check for updates to Web sites and blogs that you determine worthy. Using a feed reader, you can create your own personal newspa-per. They provide a great way to sift through hundreds of good blog authors to see if they are talking about something that is important to you. If you want to focus on stocks, you can have the blog posts of financial bloggers delivered to you through a feed reader. It is a great way to track information and it is efficient.
I use Google Reader as my feed reader. Just search for “Google Reader,” sign up to use it, and start adding the blogs or Web sites of people whose writing you want to follow. Check back with your Google Reader as often as you like, and you will find what those people have written since the last time you checked. The feed reader collects them all for you so that you do not have to go searching for each of them separately, and a good feed reader will let you look just at the headlines of the articles it has collected, so you don’t have to read the whole article unless the headline grabs your interest. Bloglines and Newsgator.com are other popular feed aggregators.
Does Valuation Matter?
When you are searching for information about a company, you will find a lot of talk and arguments about whether a stock is overvalued or undervalued, sometimes using the terms expensive and cheap. That is probably the most talked about aspect of investing because it’s debatable. You can turn the TV to business news anytime and hear talk about a stock being overvalued or undervalued. It is the same game that is played on sports channels. Is this team good or is it bad? Are they going to win or are they going to lose? Did the team overpay for this or that pitcher? It makes sense that this happens because it fills time. What the hell else can you talk about? Overvalued, undervalued, expensive, and cheap are the most overused and abused terms in the stock market. They are “talking head” terms. For the most part, growth stocks couldn’t care less about valuation, and the people who buy the fastest-growing companies do not focus on valuation, either.
Every industry has measures against which analysts judge the companies in that industry. Measures might be such things as cash flow, book value, return on equity, earnings, assets, and so forth. A standard measure across industries is P/E, or price- earnings ratio, which is calculated by dividing the current stock price by the earnings per share. So, for example, if Apple is selling at $160 a share and earning $4 a share, its P/E would be 40. P/E is measured incessantly, the objective being to find a company that is growing faster than other companies in its industry or in the market as a whole.
When someone says, “This stock is undervalued or overvalued,” by whatever measure they are using, you must check the price. The “P” in P/E is very important. The price is what matters, within the context of where you think a company can grow. Stocks that are trending up will always be overvalued. They will always be considered “expensive.” In both good markets and bad, there is only a limited supply of good companies. That is just the way it is. It is like tickets for a Super Bowl: there is only a certain number of them. If a manager for a big investment company likes a particular stock, even if it is expensive by traditional measures, that manager will close his eyes, plug his nose, and just buy the stock. When he does that, he drives the price up.
Don’t get tricked by the valuation arguments. If you use sound entries in the best growth stocks, you will be surprised how “overvalued” your winners become. Investing in stocks is still ruled by the giant sharks you are following, and if you think you found a stock the sharks like, valuation is not the best deci-sion point. Don’t get me wrong—valuation does matter, but it only mat-ters when a company’s sales slip or slow unexpectedly. Eventually, they all slip and/or slow, even Apple and Google.
It’s like weighing your child on a scale at the doctor’s office. If your child won’t stand still on the scale, you can only speculate about how much he weighs. If the stock doesn’t stand still, you can’t value it, so valuations mean absolutely nothing during a stock’s growth phase. That’s the way it was for Google, Apple, Research In Motion, and hundreds of other leading stocks during 2007. You couldn’t know what markets were emerging for their products. You couldn’t know where Apple was going next to open stores. Germany, Russia, Brazil, Turkey, China, India? You might talk with someone in one department of the company, but the company is growing so fast that a person in another department just signed a multibillion-dollar deal, and the person you talked with doesn’t know about that.
Valuation matters when the market’s mood shifts from complacency and euphoria to doom and gloom, but timing these shifts is a fool’s game. At the beginning of June 2007, Amazon was in the sixties, Google was approaching $500, and Baidu, a Chinese search engine, was around $200. All three were thought to be overvalued. You might have concluded, “Oh my God! There’s nowhere to go but down.” Then Amazon spiked to near-all-time highs at $100, Google climbed to $740 , and Baidu rocketed to over $400 by the fall. Overvaluation did not matter. If you are looking to find trends and ride them, valuation is simply not your most important guide. Price direction and money management matter most.
How to Use Wallstrip
Let me give you a tour of Wallstrip.com because it is a great place (I am biased, of course) to do the kind of homework that is covered in this chapter. Go to your computer, take this book along with you, and call up www.wallstrip.com.
Each day, at the top of the wider column on the Web page, you will find a three-minute Web video show about our stock or sector of the day. After you have watched the show, read what I have to say about it from a ten-thousand-foot view, from a trend view. I tell my story about each stock we preview. Just because we cover a stock does not mean that I’m recommending it, but come each day, watch the show and see if it is talking about a company that strikes a chord with you. If it doesn’t resonate with you, come back the next day and the next. Keep checking in.
The show is intended to be a snapshot of a trending business, sector, or country. We examine the business catalyst. Sometimes you will see shows about companies you are familiar with, but most of the companies will be new to you. I like to interact with other people about the stock of the day, so comments from readers are invited, and you will find a link that takes you to all of those comments.
If the company piques your interest, type the name of the company or the company’s stock symbol into a Google or Yahoo search bar to find out what the company does and how the stock has done in the past. Then you can click your way to the company’s Web site to find out what industries it is in, who the management is, and how the company operates.
In the narrower column at Wallstrip.com you will find all kinds of useful goodies, such as:
• A list of the top-performing companies that have already been cov-ered at Wallstrip.com that gives you quick access to information about our winners.
• A search bar that allows you to easily browse the Wallstrip.com ar-chives to find everything that has been written at the site about any of the companies that we have profiled. Search through the archives to see what other companies we’ve covered and see if anything rings true with you.
• The current list of all-time highs includes links to more information about each company.
• Links to the Web sites or blogs of other people whose opinions I trust give you immediate access to their thinking.
• You can also subscribe to Wallstrip.com or have it delivered to you by your feed reader wherever you are and whenever it is updated.
Money spent by the consumers and money flow from the institutions is all you need to follow to beat the market. Combine this with money management (the real holy grail) and you will manage billions. On my blog, as in my financial life, I stick to my main money-management principles: Sell when you can, Don’t be a pig, and Booking profits and paying taxes is fine. This is definitely not perfect, but it has produced some huge winners and helped me blog responsibly for three years now on the subject of trends. Start with an all-time high, take our one-a-day video blog show at Wallstrip, and digest it. If it is not for you, come back tomorrow to find out if there are any companies you should be considering for investment.
To-Do List
1. No matter how much homework you do, failure happens!
2. Price of a stock matters most. If it’s not at or near an all-time high, pass.
3. Conviction and discipline are both important. Piece together your own story about each stock that you consider, keeping in mind its cata-lyst, opportunity, ability to execute, and where it is in its life cycle.
4. Find the pieces of your story, for free, on the Internet at financial pages, blogs, and other Web sites.
5. Use a feed reader like Google’s to pull information to you.
6. Check in at Wallstrip.com daily for investment ideas.