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.

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.

MORE RESOURCES:

RELATED ARTICLES

Buy and Hold Investment Strategy
"Buy and hold" is one of the most heralded investment strategies promoted today. "Buy and hold" is also one of the few investment methods where you are guaranteed to lose money 2 out of every 5 years.

Is Your Garage Full Of Junk?
I have a 2-car garage. There are nice shelves on one side and a good practical workbench with a vice on the other side.

Stock Valuation using the SMP Model
Disclaimer: Please note that I do not necessarily purchase, own, or partake of any of the securities or other financial instruments mentioned in this article. I also do not take any responsibility for any actions resulting from any actions taken by anyone who reads this article.

The Right Mutual Funds For Baby Boomers
If you are a baby boomer, time is not on your side. Many baby boomers see retirement age fast approaching with little to nothing in the way of retirement assets that will allow them to actually retire and live a comfortable lifestyle.

DIY Portfolio Management
Exchange Traded Funds (ETFs) are growing. Investors are choosing low annual expense and market return over high annual expense and promised performance.

Starbucks Stock is Up
Starbucks earnings are up again and so is their stock slightly. It appears they are exporting America's weakness to caffeine and sugar around the world.

Ignore Stock Market Talking Heads
You should ignore analysts on TV, the radio, the newspaper and all other TALKING HEADS when it comes to investing! What stocks do they talk about? - The same old group, every day of every year - Why? Because they don't know any better, they are sheep like the general public, repeating what every economic textbook says and every other economist tells them to say. Everyday, the same companies are highlighted on the evening news -WHY?They aren't going anywhere.

"Fears Only Enemy Is Action"
What a great statement!I just heard someone use it in the context of personal and financial success and it struck me as a brilliant summary of an issue we raise in the SMG Tutorials.Fear is a huge issue with a lot of traders.

Trapeze Artist - Swinging with the Stock Market
When we go to the circus we see a trapeze artist working on a high wire or swing either alone or with other athletes. They know what they are doing because of constant practice, but every once in a while there can be a mistake, even a small one that can cause one of them to fall.

Red, Green, Yellow - or - Stop, Go, Go Very Fast: Which Describes Your Online Trading?
Ever notice how behavior in one area of life can apply to behavior in other areas of life? For example, I've noticed a number of things while driving that apply to online trading. One of them is regarding how people behave toward traffic signals.

Overseas Investing: Going Against the Mainstream
TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This strategy works in the short term, but can lead to difficulty in the longer haul.

Bad News is Good News
For weeks, no, months we have been bombarded with nothing but negative news about the economy in general and thousands of individual companies. The stock market has dropped thousands of points and more than $8 trillion in paper assets have disappeared.

The Secret Method to Selecting a Winning Trading System
Every successful trader has a winning system. There are of course, as many systems out there, as there are traders.

Whos Calling?
Its dinnertime and the phone rings. It's Joe Noname with SuchNSuch Investment Company and has he got a deal for you.

Mutual Funds are Dead
You may have wondered why your mutual funds have been going down for the past 2 years. The answer is very simple, but not one you will hear from Wall Street as they want you to send money.

Its A Duck
If it walks like a duck, quacks like a duck and looks like a duck it must be a duck.In the stock market if there are more buyers than sellers, more stocks are going up than down and the trend of the general market is higher it must be a bull.

Successful Trading - Taking Profits - Part 2
Suppose your position has made a big move and you moved your stop to your purchase price as recommended. Then let's say your stock continues to make a big move and now we're asking again the questions we asked back in the first paragraph.

Trading as a Business
What can I expect to make my first year of trading?We get questions like this one quite often. We find that most aspiring traders don't have a clue as to what to expect from the market.

Investment Attorneys and Garbage Stocks
How is it possible that trash Companies are posting less than expected results? Trash Companies are thought of by prudish investors as some of the safest stocks to own. Ask Warren in his Buffet of Essays on Corporate America.

Forecasting the Stock Market
Every day I see in the financial section of newspapers how to forecast what the market will do in 6 months, 12 months, several years. "Ten stocks that will double in the next 6 months.