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Stock Ideas Investors Daily Edge A Little Late for the Party
Stock Ideas Investors Daily Edge A Little Late for the Party 
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| The London investment banker I was talking to liked my idea so much, he looked like he might lay out his checkbook on the antique mahogany table and cut me a check for hundreds of thousands of dollars right there on the spot... | |
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| A Little Late for the Party |
| Monday, 08 October 2007 | ||||||||
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Dear Reader, When I arrived at the office and started reading the morning news on Tuesday, I had to laugh at one of the headlines. This is the headline as it appeared on Briefing.com: Baidu.com initiated with an Overweight at J.P. MorganNow the reason this headline made me laugh was the fact that Baidu.com is up more than 230 percent in the past six months. That’s right, the stock jumped from 94.40 on April 4 to 316.60 today (Thursday), just six months later. And J.P. Morgan finally hops on board with an “overweight” rating. I have to tell you, I keep a trading journal and I write down thoughts about the market and individual stocks in the journal each morning. On April 13, BIDU appeared on my bullish list. Here are my notes: BIDU - stock is forming a double bottom, analysts ratings are 3 buys, 9 holds, and 3 sells, A+ fundamental rating in IBDNow I wish I could tell you that I recommended the stock back then or that I bought a few hundred shares. Unfortunately, that would be lying. The stock hit my radar back then and it has never looked back since. When it took off, I kept waiting for a re-test of former resistance, but when it gapped higher at the end of April, it never looked back.
I’m not happy about not acting on my own thoughts and comments, but how can an analyst come out with an overweight ranking on BIDU after it has jumped so sharply. This reminds me of the Internet sector back in 1999. Analysts don’t want to miss the boat and so they issue ratings on stocks that have already made their move. My point is that analysts don’t know anything more than the average Joe, even with the resources they have at their disposal. Sure, they make a good call every now and then, but who doesn’t? I have talked about using sentiment before and how it creates a very powerful combination when combined with technical and fundamental analysis. Stories like this one just cause my beliefs to get stronger and stronger. Good luck and good trading, Rick P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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