InvestingDaily.com

Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.



Close
FEATURED STRATEGY

This Two-Minute Market Move Could Make You Rich

This Two-Minute Market Move Could Make You Rich[Revealed] How to generate instant income from the stock market. Over and over again. At will. This technique is so powerful – and safe – we’re guaranteeing you can use it to generate $1 million (or more) in retirement cash. And we’ll even send you a $1,000 check to kickstart your journey. Go here for details.

 

Watch the Best of Wall Street

By Scott Chan on March 19, 2018

Sometimes, you may notice headlines broadcasting certain renowned money managers buying this or selling that. Whenever folks like Warren Buffett, George Soros, and Carl Icahn—names most investors are familiar with—make a big trade in some stock, you will probably hear it on the news.

The media hypes these moves with good reason: the big names attract eyeballs and readership. But as an investor, you should also pay attention because these guys are respected investing gurus. Their track record proves that they are very good at what they do. Owning the same stocks as they hold does not guarantee that you will profit, but at least you can be reasonably confident that whatever they buy has a good chance to make money.

Why the Pros Have the Edge

Besides having great intelligence, experience, and good instincts, these gurus also hold other advantages over the average joe. They have superior access to resources and information. And I am not talking about insider trading—which is illegal.

They have very deep pockets and they know many important people. This means they have the best computer programs at their fingertips to research and analyze economic data and companies. They can hire top-notch analysts and portfolio managers to help pick stocks. They also know experts who can give them insights about specific industries and companies to help them make wise investment decisions.

Investing Is Their Life

Most individual investors have other things to do besides looking at their stock portfolios all day. They usually manage their portfolios in their spare time. And they are investing to build a nice nest egg for themselves and their families.

Professional investors, though, live and breathe investing. Their job is to make as much money as they can. Their dedication to investing and their experience put them at an advantage over a typical retail investor.

As a result, big institutional investors—the so-called “smart money”—tend to be market leaders and the little guys are market followers. Quite often, retail investors are late to the game. By the time their friends tell them about some great stock, it’s probably already too late.

This is why it makes sense to pay attention to the best of Wall Street and see what they buy. You let them do the work for you, and you follow suit.

The Key is High Conviction

However, you should not blindly follow someone into a stock without taking a look at the stock—and the underlying company—first. And realistically, you cannot possibly buy everything these gurus own. The key is to pick out these money managers’ highest-conviction buys. This means that they are really making an unusual bet that strongly suggests that they have done their homework and they are convinced the stock will be a big winner.

For example, if a top money manager’s hedge fund buys a bunch of Apple (NASDAQ: AAPL) shares, that’s not really a big deal. Apple is the largest company in the world by market cap, and AAPL is widely held by institutional investors. Indeed, the surprise is when a top fund manager doesn’t hold some shares.

But if the same hedge fund invested $50 million in a small $500-million company, then there’s reason to take a long look at this small company.

Of course, the above example has been simplified to make a point. In practice, the ways to spot the standouts are usually more subtle and there’s no one-size-fits-all trick. It takes experience and good-old-fashion due diligence to make following the best of Wall Street consistently pay off. But, done correctly, this can be a very successful investing strategy.


You might also enjoy…

 

Here’s What’s Really Going to Crush the Market

Most folks understand the basic concept of inflation… things cost more money. But tragically, most don’t understand the real implications of what it means for their financial future. 

Or just how dangerous it’s becoming right now. Today.

And there are two reasons for that…

First, the U.S. government’s calculations barely take into account two of the things you and I are paying more and more for every day: energy and food.

Second, since inflation really hasn’t been an issue for the past 30 years here in the U.S., most analysts won’t dare to say it’s on the rise because they’ll suffer professionally. 

But I’ve made a name for myself by always saying what needs to be said. Which is why I’ve prepared a new special report that’ll give you simple instructions on how to protect yourself from the coming storm.

And better still…

It gives you the full story on the six types of investments that are destined to soar 275%… 375%… even up to 575% over the next few years as the winds of inflation flatten the U.S. economy.

You can get your free copy here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.