A Return to Stock-Picking

 | Sep 17, 2012 | 1:25 PM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

srpt

,

swhc

With the central banks largely out of the way now, the biggest fear of many market players is that the market no longer has any major catalysts to drive it higher. After all, it has been moving higher all summer in anticipation that the printing presses would be unleashed again, but there haven't been many positives economically and there is great concern that earnings may show the effects of a struggling Europe and China.

The optimistic view is that if we are less focused on macroeconomic matters, maybe we'll have a better market for stock-picking. One of the challenges of the market for quite some time is that we have had to constantly dance to the next major headline. It didn't matter what stocks you were buying, as most would move in tandem with the news.

Many market players enjoy navigating major economic headlines, but I've always preferred individual stock-picking. There is nothing better than digging for undiscovered gems and buying them as the market starts to embrace them.

I've written often in the last few years about how the market doesn't have the same upbeat sentiment and is losing the individual investors who provide much of the excitement. I believe one of the major reasons that has occurred is that stock picking has become much less important. Efforts are not rewarded and even the best stock picks can result in losses if you aren't in tune with the macro environment.

Now that the central banks will not dominate the action to the same degree, it will be a good time for stock-picking to return to the forefront. Even if you are bearish about the big picture, there should continue to be standout stocks, like Apple (AAPL), that are performing operationally at a much higher level.

The trading continues to be very slow and I'm working hard on stock-picking with trades in names like Sarepta (SRPT) and Smith & Wesson (SWHC) but it is shaping up to be a day of digestion, and that isn't all bad.

Columnist Conversations

GS has cleared the important hurdle on the way up which increases the odds for an eventual rally towards the 1...
A good quarterly report has sent shares of Calamos Asset Management (CLMS) sharply higher. CLMS was up about ...
Electronics distributor Ingram Micro (IM) reported better than 16% growth in its Q3 sending the stock up about...
Market posting decent day considering Ebola getting headlines again. Believe investors have learned not to pa...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.