In the past week I have had a couple of mates get in touch to ask my thoughts on different stocks:
Q1/ Which stocks do I think will go up?
Q2/ Do I think this stock will go up?
Answer to both: Sorry I have no idea and I don’t believe anybody else does either – even as much as they try to make you believe they do.
There are just too many moving parts to predict if a stock will go up – interest rates, currencies, politics, war, terrorism, supply, demand, new innovations, new technologies, natural disasters and on and on…. the future is simply a mystery to everyone.
Even if you do feel you know what is going to happen, it’s really hard to get an edge. Trying to workout the 1st, 2nd, 3rd, 4th and 5th layers of cause and effect to determine a price movement when you are competing against teams of very well funded Hedge Funds with up to date data is not a game I am interested in playing. I believe it is not that far away from gambling and I just don’t try to invest that way.
I am simply a value investor. I sit patiently researching and waiting for great companies or companies with solid, reliable assets to be offered up for cheap during some sort of bad news event or down-turn that I am confident they can recover from. I am also never in a huge rush to find these investments either as it doesn’t take that many great investments to make a huge difference to your long-term portfolio.
This doesn’t answer their specific question, but it’s the only honest response I have – and I believe to be much more valuable than a speculative stock price recommendation.
Enjoy the ride!