Price Targets

Every day in any financial publication you will find the Wall Street mavens giving their predictions on many stocks. It was issued here and should go there. It is now undervalued and is worth that much more. Really?

Has anyone gone back to check out these predictions? I haven't, but I know that as a stock increases in price these same geniuses continue to raise their target prices. How they arrive at these mysterious numbers is beyond me. When their price target is reached do they ever tell you to sell? Not that I can recall. And if it starts down do you ever hear from them again. Not hardly. They are now predicting some other stock.

All this is done in loud voices and big headlines. There are many reasons given as to why XYZ will go to $230. And maybe it will, but when it gets there (if it does) what do I do? Not one of the Maul Street crowd ever tells you to sell.

Price targets are like doing research. Both are worthless as far as making money in the stock market is concerned.

Here is the secret of how to make money in one of those hot-shot stocks. First don't pay any attention to projected price by any broker. They don't know. All that talk is window dressing to get you to buy. Remember there is someone willing to sell to you at that price.

And second you should be selling out near the top (not at the top). It is not that difficult to do, but you won't get this from your broker. Since no one knows where the top is then you have to let the market action tell you when to take your profit. How? With a trailing stop loss order.

Let's say this hummer took off from $14 and it is now $35. WOW! Should you buy it? If the public relations is new and you want to take a chance then buy it, but have your exit strategy in place. The media blitz for this stock says it will go to $90 and sure enough it does, but it keeps on going. It went right through its target and is now in outer space above $150 and still has rocket fuel to burn. Your trailing stop is now somewhere about $125 to $135. This beauty tops at $255 and plays around there for several weeks when it starts down and hits your stop at about $230. Aren't you glad you didn't sell at $90?

The above stock will be nameless here, but I did see this happen and it finally ended down at $2.50. That is why buy and hold should not be in your lexicon if you are an investor.

Price targets are there for the gullible investors. Learn to use this Wall Street trick to your advantage by using a trailing stop.

Copyright 2005

Al Thomas' best selling book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter to receive his market letter for 3 months at www.mutualfundmagic.com to discover why he's the man that Wall Street does not want you to know.

---

VooDoo Training For the Stock Market

If you go to Haiti or other places in the... Read More

Stock Market Education; Day Trading for Beginnners; How to Pick Stocks

The trading method you employ to approach the stock market... Read More

A Personal Stock Market Investment Philosophy

∙ Make every investment in the stock market a long-term... Read More

Investing in the Stock Market - When To!

Is really not as important as to how you invest... Read More

Dividend Reinvestment Plans: Investing on Automatic Pilot

If you're like many investors who squander those small dividend... Read More

The Elephant

Four blind men were asked to give a description of... Read More

Pension Plans

If you have a pension plan at work you will... Read More

Dividend Paying Stocks

I would like to share with the reader an article... Read More

Long-Term Investment In Todays Market?

The stock market is very unstable at this time going... Read More

What the Hell is a Stock option?

A 'stock option' is a contract between two parties giving... Read More

Kick The Tires

Before you buy another car you walk around the lot,... Read More

The Club

Yesterday I received my monthly issue of MONEY magazine. This... Read More

Traders, Defend Against the Dreaded Death Spiral.

It has often been said that there is only two... Read More

Why Stock Is More Risky Than Options!

You probably have been told that options are risky. Even... Read More

The Secret Art of Backtesting

If you have not back tested your trading system, you... Read More

The Holy Grail (of Investment)

Every year I go to the Money Show in Orlando,... Read More

Trading Tips No 5: Stock Trading Curve Drawdown and Commitment

All stock trading and investing methods must deal with the... Read More

Outsourcing

It's about time someone spoke the truth concerning outsourcing. The... Read More

What is the Most Important Indicator of All?

Most stock market traders have a favorite technical indicator.The one... Read More

It Cant Be Done

Wouldn't it be nice if you were only in the... Read More

Psychology ? How to Reduce Negative Thoughts Relating to Trading?

The thinking process of the brain relating to the... Read More

Making Outsized Returns in the Stock Market - Using the Dow Theory

The Dow TheoryCharles H. Dow... Read More

How to Pay Less and Get More: Discount Broker vs Professional

How do you invest? What do you really pay? At... Read More

Trading Baskets II: The Crapolio, A Roll of the Dice in the Stock Market

In a previously written article, we expanded the use of... Read More

Stock Loans

Hedge current portfolio positions and gain access to capital resources... Read More

Choosing An Investment Stock Broker

If you want one.And I don't recommend any broker with... Read More

Smart Day Trading Strategies to Help You Make Money in the Stock Market

Stock trading can be a very profitable activity. You can... Read More

Intervention

Intervention. Now don't let that big word scare you. The... Read More

What To Buy?

Now that you have some money burning a hole in... Read More

10 Tips For Creating Wealth From the Stock Market

1. Do not spread your money too thin.My friend has... Read More

Performance Funds

Mutual funds are doing more and more to discourage investors... Read More

Jack and Jill

Jack and Jill went up the hill to fetch a... Read More

Market Experience of a Naïve Stock Operator

Sometime in the third quarter of 1997, someone told me... Read More