A COCKTAIL PARTY, alas, is linguistically engineered to be equal parts cocktails and party. When I’m invited to such events, common courtesy compels me to both imbibe and converse. And while my policy on investment advice at such occasions is “don’t ask, don’t tell,” the unfortunate reality is that I’m often asked and I’m often told. Indeed, where there’s alcohol and adults, the discussion eventually turns to the market.
When I’m asked what I think of XYZ, I’ll gladly share my two cents, along with my perspective of how to best approach and, even more plainly, how to trade the particular investment. As I often point out, it’s technique, not simple security selection, that has the biggest impact on success. What lays between the folds of simple “buy, sell or hold” nostrums are the details of where money is actually made.
When asked about XYZ, some people analyze it on a micro level, offering their perspective on management, the company’s products or competitive pressures within the sector. Others peer through the macroeconomic lens, pontificating on how business cycle, interest rate or currency trends might affect the stock price in the future. (more…)