Why the New High List matters for stocks

Posted by Howard
on July 14th, 2006

Most investors look at the market from behind. The Wisdom of Crowds approach and comfort seeking way to invest. We are born with the instinct to suck on our thumbs or a nipple or carry a blankie for comfort. It carries right through your investment life. Most investors read the same rags, watch the same shows and look at the same lists – COMFORT.

STOP IT!

Just read a great post over at Chartreuse that says Stop looking Behind You. It is very relevant to trend following and how I approach the stock market part of my portfolio.

The truth is that for the most part, the most overowned stocks are the ones that hit the new-low list. Stocks, like MUSIC or ACTING carrers, are hard to turn around. Think Dell, EMC, Lucent, Nortel, Intel, Microsoft etc…One share at a time these darlings are sold by brokers to small investors until they reach the new low-list. It is happening to these stocks today. You feel comfortable buying these from your BROKER or from watching CNBC’s ANAList

Only the bravest and boldest and richest people should and do play in that space.

There is no better place for investors to start and end their day than with THE NEW HIGH LIST list. Better yet, the All-Time high list.

I won’t bore you with the studies. I hope to be able to prove it over time with a fund that I am working with.

The new high list is the “American Idol” of stocks. Thing is, they are not as owned or loved as you think they are.

Most important, it can work well and is a powerful, simple starting point to building solid stock portfolios.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.