I have a new column up at Real Money: Nine Stocks for Playing the Long Side Safely
It is based on our response to a request from research clients, managed asset accounts, and institutional traders, who have all asked some variation of this question:
"I am afraid this market is overvalued, over-extended, and
overdue for a major correction — but I want to play from the long side
(variation: I cannot afford to fall behind my benchmark). How can I
participate in a way that is relatively safe, but still allows me
upside?"
The response we crafted was to quantitatively screen stocks for these characteristics:
1) Identify strong sectors with good money flow;
2) Screen for stocks with the best technical and fundamental potential;
3) Look for stocks within those sectors with desirable risk/reward characteristics;
4) Find stocks that are near good entry points;
5) Avoid the "runaway momentum" names;
6) Look for stop-loss protection that is a reasonable percentage downside away.
The column identifies nine firms, with entries, targets, and stop losses.
Before you yell "Capitulation!," understand that this was in response to client requests. I continue to have
concerns about a laundry list of economic problems: inflation, slowing
growth, slow job creation, rising interest rates, the drag from
housing.
The stocks and sectors I picked, however, are more likely to outperform on a
relative (as well as on an absolute) basis, especially if the economy
slows or slips into a recession. The key is identifying those stocks
that will participate at much lower levels of risk.
I’ll see if I can get it moved to the free site eventually . . .
>
Source:
Nine Stocks for Playing the Long Side Safely
RealMoney.com
6/8/2007 10:32 AM EDT
http://www.thestreet.com/p/rmoney/investing/10361438.html
CAPITULATION!
/sorry…had to be done.
Pool Shark,
Why didn’t you post the names of the stocks, too?
I hope MCD is in your nine. The growth is absolutely fantastic. Its amazing traveling across Asia and seeing how those golden arches continue to draw crowds.
Yeah, you could post some names …
If the people asking these questions are in the business, and actually say something like “I cannot afford to fall behind my benchmark”….
They shouldn’t be in the business. Makes for a good article for individual investors on a pay site though.
BR,
Are you familiar with Gerald Celente (Trends Research Institute) ? A fellow killer-sharp guy who tells it like it is…
On a serious note, I’m even more of a TBP fan! It’s quite refreshing to see you use your talent and resources for something so logical as long-term investing! You almost sound apologetic to deviate from the short-term trader perspective. It’s quite the opposite: You’ve just shown that you truly do see the “big picture” and that there is a difference between knowledge and wisdom. You should be proud of that!
I’ll be even more impressed if you write an article on something really out of your element like long-term asset allocation with index funds!
Keep up the good work and enjoy the weekend…
Kent (aka The Financial Philosopher)
Regardless of how one feels about Jim Cramer, RealMoney is a subscription everyone with any true interest and/or involvement in the markets should have.
Truth be known Barry has had pretty much the same calls since late last year except with more caution the first quarter or so.
You guys all read “bear” but the only short I recall was from last year with perhaps one reiteration since and a call for a little hedging or shorting when the QQQ’s were weak a few months back to protect portfolios based on investment term.
He added a few to the new list but some where oldies but goodies we already made good money on and remain good long investments.
No in and out trades to speak of.
Barry’s a responsible guy.