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Published: November 29, 2010
I've never worked a day on Wall Street.
I've never worked at Goldman Sachs (NYSE: GS) or a hedge fund,
either. I'm not what you call an insider by any means.
But that hasn't stopped me from being a successful investor. The
good news is that it doesn't have to stop you, either.
If you're like most investors, you are dumbfounded by the
complexity that seems intrinsic to the stock market today. Heck,
even the pros on Wall Street didn't know what was actually
inside those fancy mortgage-backed securities they were buying
until after the housing collapse. If they don't know what
they're doing, how can you and millions of other investors stand
a chance?
Because you have one powerful tool at your disposal -- common
sense -- and you'd be amazed at how far it can get you in this
market.
I earned an engineering degree at Columbia and a master's at the
University of Texas. I earned a Series 3 certification in
commodities and futures. I've created investment education
courses used by the major investment houses. I've been published
in economics and statistics. I've provided financial analysis in
commercial litigation. (My legal team once won a $100 million
settlement for a telecom patent holder.)
In other words, I have the background and experience to hold my
own against some of the big boys on Wall Street.
And don't get me wrong, that experience is invaluable when I'm
researching the ins and outs of a stock. But I've found my best
ideas are usually driven by the simplest forces. That's great
news for everyday investors.
Let me explain exactly what I mean.
A year ago, I was looking for a pick for my November issue of
Stock of the Month.
But I didn't start my search with some extensive screen or by
researching an up-and-coming tech company that might displace
Apple (Nasdaq: AAPL). I did something much more simple. I
used common sense.
We were still mired in a soft economy, so I wanted to find a
segment that would do well as consumers cut back on spending. I
found that spot in beauty supplies. People still want to feel
good about themselves, but in tough times not as many folks will
go to a fancy salon.
That's common sense.
So I bought Sally Beauty Holdings (NYSE: SBH) -- a chain
of beauty supply stores headquartered here in Texas. Its store
locations are heavily trafficked by price-conscious
"do-it-yourself" retail customers.
I just sold my position a few weeks ago... for a +58.0% profit.
Don't get me wrong; this isn't about just picking a stock and
throwing money at it based on common sense. There's a lot of
research that goes behind the stocks I buy, and you should do
the same.
Action to Take --> But if
you think it's only Wall Street that's able to make money from
the market these days, I want you to know that there are still
profits to be had -- and you don't have to be a Ph.D. or Wall
Street insider to earn a nice return.
[By the way, I think one of the most common sense areas to
invest right now is in companies that help ease "paperwork." In
the wake of the healthcare reform bill, there are going to be
some pretty nasty tax issues to deal with -- especially for
small businesses. Those companies that can ease this burden for
businesses and individuals should do pretty well by investors.]
-- Amy Calistri
Editor
High-Yield Investing
High-Yield International |
