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Does the Average Investor Stand a Chance?Dudley Baker Last Sunday evening, being bored out of my mind, I began analyzing the stock and index recommendations of each of the 9 newsletters I subscribe to - ones you would recognize as the biggest, the best and the most respected in the industry - for an insight into their opinions and current analyses of where the markets are and where they are going although not necessarily for their stock recommendations. I had a 'gut' feeling which ones had recommended, what but was totally surprised by what I discovered. Believe it or not, there were a total of 271 different stocks or indices recommended. Even I was shocked at this number. Only 9 services but a total of 271 recommendations, Wow! Personally, I own about 100 different stocks - shares of mining and energy companies (uranium and oil & gas) including numerous long-term warrants - but 'only' 45 of their collective 271 recommendations. I immediately wondered where in the world I got the information or courage to buy the other 55 companies in my portfolio. Well, it's a long story as I am frequently a 'gun-slinger' with respect to some of my personal investments (which I would never recommend to others but which normally work out extremely well for me) as I am in a position to accept a larger risk - no wife, house paid for, no debt, no problems, well, life is good! I attempt to reduce my risk by diversifying into many different companies. But back to the analysis: Does the Average Investor Stand a Chance? If you subscribe to these same 9 investment services, what do you do? How do you limit the recommendations to a reasonable number of stocks to purchase? I am guessing here that the average investor may own a minimum of 10 and maximum of 20 stocks or warrants. So, if you only followed the individual recommendations of these 9 services, you would have to eliminate approximately 250 of their recommendations. Quite a task! What I did next was to look at those specific companies which were recommended by more than one newsletter. As you might guess, Goldcorp was recommended by 6 of the 9 newsletters. The analysis reflects the following:
If you subscribe to all 9 of these services, you could limit your investments to those 16 companies which were recommended by 3 or more analysts or perhaps consider call options, LEAPS or long-term warrants on those recommendations. Unfortunately, the remaining 255 recommendations which have only 1 or 2 analysts recommending the stocks or indices would require one heck of a lot of work on your part or pure faith in the newsletters. Does the Average Investor Stand a Chance? Definitely! In my opinion, all investors should be prepared to participate in the decision process as to which specific stocks, indices, warrants, etc to purchase. Those investors spending the time and additional analysis will be richly rewarded as this bull market in the precious metals and energy sector surges forward. Patience, due diligence and timing our entry points, I confidently believe, will lead investors to incredible gains in the coming months. July 27, 2006 Dudley Baker is the owner/editor of Precious Metals Warrants, a market data service which provides you with the details on all mining & energy companies with warrants trading on the U.S. and Canadian Exchanges. As new warrants are listed for trading they alert you via an e-mail blast. You are provided with links to the companies' websites, links to quotes and charts, tips for placing orders and much more. Precious Metals Warrants do not make any specific recommendations in their service. They do the work for you and provide you with the knowledge, trading tips and the confidence in placing your orders. For those investors seeking more knowledge on warrants do visit the Learning Center at Precious Metals Warrants, where you will find much more information and examples to enhance your learning experience. You may also sign up for The Warrant Report free weekly email. Disclaimer/Disclosure |
