I'm calling out the professional stock brokers ....

Here is my great revelation on the stock market. Nobody has any real clue what’s going on.

 

During my time working on my MBA, I realized a great expansion of my understanding of financial markets. I started actively watching the stock market. I expanded my financial education so that my own investments in the markets would have positive returns. I started investing this year with my own brokerage account.

 

My revelation is not shocking to the people similar to me: small individual investors. The professional investors will tell you otherwise, but I know better. Here are my reasons why I believe I’m right and most of the paid professionals are wrong.

 

ü      Analysts are not interested in the same metrics as executives. I believe analysts are interested in one main metric: net income.  However a company makes that bigger, so be it. Reduce expenses, grow sales, and increase prices.

ü      Expectations are the measuring stick. Watch what happens to a stock price when a company releases record earnings, but didn’t meet “the survey of the industry analysts.”  You try hitting a moving target.

ü      Investors want good news. Keep an eye on the Dow Jones Industrial Average on days when there is what investors would call good news. An example would be positive earnings report from a major company. A vast majority of these days the DJIA goes up.

ü      Stock brokers make their money when you buy. Seen anyone issue sell recommendation lately? Seen anyone issue a second sell recommendation? Every year there is at least one article about how lopsided the buy recommendations are to the sell recommendations.

 

What did I do? I grew my financial knowledge and developed my own style of investing. My theories are borrowed (if I like the person) or stolen (if I don’t like the person). I took inspiration from various other investors.  I recognized my own risk/reward level.

 

So far I’m a genius. My portfolio is up 13% in four months. Of course there is winner and a loser in the pile. I’m okay with that. It’s my call to buy, sell, and hold. I don’t have the boss standing behind be saying “The minute I laid eyes on you, I knew you were no good.”

 

Hopefully I’ll score big on my speculative play. Then I can update the blog every day!