As people email me about their pensions and their investments and their concerns, I am reminded of my time at Bloomberg TV. On Bloomberg TV, as a stock picker, I had the ability to script my whole session. So, on those slots on Wednesday evenings, as Sally, my co-presenter, asked me for my ‘buy’ and my ‘sell’ of the week, I would have a list of criteria each week I would go through in my preparation.
Now, some background, the way it worked was that each week, I would pick a stock which I thought would rise over the next 6 months (my ‘buy’) and which I thought would fall over the next six months (my ‘sell). The programme went out live from 8pm-9pm. I would come in at around 11am to prepare for my noon slot and for the evening show. For the stock-picking I had a set of criteria to make life easier.
But don’t forget, each week I am putting my head on the block. Make no mistake if you get it wrong, you’re costing people money and they aren’t too forgiving. And don’t forget the bulletin boards. Investors on their can kill your reputation in a few anonymous keystrokes.
Those criteria and that stock-picking meant for one six month period I had a 100% track record on each week’s buy and each week’s sell for some 3 months. In other words, each week the two stock picks from 6 months ago had both done what they were supposed to: the ‘buy’ had gone up and the ‘sell’ had gone down.
In fact, I also over the only 6 month period we had analysed, beat on performance with my stock picks every single other analysts, guru and pundit on Bloomberg.
I published this in my book Investing Unplugged (Macmillan). The point for here is that, although I could put more detail into a stock-pick, such as when to enter, exit points, stop-losses, even then I couldn’t, because I knew in Sally’s book, sitting on her lap, all that would be written down would be “Vodafone – buy”. And rightly so. That was the job at hand.
And that’s the problem. What was the point of saying, “buy Vodafone if the share price rises above 120p, but any fall below 115p would be an exit. If you do buy keep up a trailing stop-loss so that you exit on a 1 week low.” All that the viewers were interested in six months later were the scores. The superficiality of it all! But that grabs people’s attention.
So be careful.