Does the Average Investor Stand a Chance?

By: Dudley Baker | Thu, Jul 27, 2006
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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 one's 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:

 

# Analysts Recommending

1

company (Goldcorp)

6

3

companies

5

2

companies

4

10

companies

3

39

companies

2

216

companies

1

271

Total Recommendations

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. /p>

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, we confidently believe, will lead investors to incredible gains in the coming months.

 


 

Dudley Baker

Author: Dudley Baker

Dudley Pierce Baker
Founder/Editor - Guadalajara/Ajijic, Mexico
CommonStockWarrants.com
A Market Data Service for Warrants

Dudley Pierce Baker is the founder and editor of Common Stock Warrants and its predecessor, Precious Metals Warrants and a 1967 graduate of St. Mary’s University in San Antonio, Texas with a major in accounting.

Disclaimer/Disclosure Statement: CommonStockWarrants.com is not an investment advisor and any reference to specific securities does not constitute a recommendation thereof. The opinions expressed herein are the express personal opinions of Dudley Baker. Neither the information, nor the opinions expressed should be construed as a solicitation to buy any securities mentioned in this Service. Examples given are only intended to make investors aware of the potential rewards of investing in Warrants. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions involving stocks or Warrants.

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