Do you intend to learn how to consistently earn double digit and triple digit returns from stocks? The clear answer lies in information technology. Yes. Information technology.
Most of the stocks I’ve owned that have earned a lot more than 50% returns in less than annually are not even on the radar screens of the analysts of major investment firms. How do I know? Because I’ve worked at two Fortune 500 financial services firms as a Private Banker and Private Wealth Manager and never was able to find any research at these firms on the stocks that interested me the most. Why?IT-Dienstleister Düsseldorf
Because the best way to make money in investing has changed dramatically and the big investment firms haven’t kept up. One of the reasons big investment firms haven’t kept up is because most have ulterior motives as pure marketing machines. Nearly every manager at every large investment firm is compensated how much fee income and profit their office makes for the firm, not how well their financial consultants have performed for their clients. There is a huge difference between these two goals. It’s exactly why former Merrill Lynch star internet analyst Henry Blodgett once stated in a review that he never believed will be made public, that the stocks other Merrill analysts were praising on TV as top picks were “crap” and “junk” (Source: Fort Worth Star Telegram, May 26, 2002).
Even honest financial consultants at big investment firms find it difficult to find you great opportunities on the list of pool of stocks that their firm tracks. Why? Because many firms mandate older age and plenty of experience as prerequisites for their star analysts. They believe that a head industry analyst with a couple of grey hairs is far more credible when appearing facing their top clients and facing the American public on television. Personally, if I ran an investment firm, each one of my analysts would probably be under 30 years of age. Why?
Well, information technology has revolutionized the capability of analysts to find stocks with spectacular growth prospects before most people becomes aware of these stocks. Leads is found through internet search engines by searching the right keywords, and also through other creative methods, including the using blogs. Often, the most effective stock opportunities can be uncovered through non-traditional sourced elements of information, meaning NOT Reuters, NOT Bloomberg, and NOT some of the other financial information clearinghouses that big wall street firms pay a large number of dollars for each month. Often, the most effective information is free and online, but the main element is knowing how exactly to uncover it.
Typically, when you yourself have a challenge you want to solve linked to the web, whether it’s a web design problem, a problem with obtaining better internet search engine rankings for the website, setting up a blog, to be able to learn how to search online databases, and etc, can you turn to a brand new faced kid or someone with grey hair for help? A new faced kid, right? Because typically the younger generation is a lot more up-to-date on newer technology, including knowing how to govern and find data. See where I’m choosing all of this now?
The reason why you’ll never hear about the firms that in five years could be the new Microsofts and the new Dells from the portfolio managers and financial consultants at large financial services firms is because huge financial institutions have yet to appreciate that understanding how exactly to source information utilizing information technology is what has enabled the most effective stock pickers to be right so often times about stocks nobody else has ever heard of. And don’t be impressed if your financial consultant recommended IPO plays like Google that skyrocketed because depends upon knew about Google. Your financial consultant should really be uncovering the tens and tens of other Googles available that nobody else has ever heard of.
Frankly, I possibly could care less about how precisely often times the utmost effective portfolio managers of big investment houses visit the companies of stocks they recommend. I possibly could care less if these top portfolio managers have “access” to the CEOs and CFOs of these companies because of their “reputation” ;.I possibly could care less concerning the “global reach” of these investment firms that permits them to research overseas companies. None of this impresses me as a client.
I possibly could care less because the majority of time, the big financial services firms are not researching the right companies. By this, I mean the small and micro cap stocks that nobody has ever heard of. The big firms will spend tens of thousands of dollars to create these conferences at fancy hotels for their biggest clients and parade their impressive access to big time company CEOs, but nevertheless, I’d rather spend next to nothing continuing to find stocks that may give me 50% returns in less than annually versus wasting my time hearing excessive information about an enormous company that may never grow a lot more than 8% a year. But then again, that’s just my opinion.