Don’t Fall Into the Trap

People often make the mistake of chasing down stocks, like hunched back trolls, into the fucking murderhole. Right now gold and silver stocks are being bought by the homeless cadre of the market. These lads are overjoyed to own gold again and have visions of clean apartments and shampoo running around in their alcohol infested brains. I forget where I read the study that I am about to mention, but it made a lot of sense. It said if you simply avoided losing sectors, each and every year, your market returns would be substantially higher.

Think about it.

Where did buying gold/coal and other bullshit stocks get you this year? Where did buying dot coms in 2000, 2001 or 2002 get you in those years?

Here are some stocks that are down big in 2014, that many of you will chase down into the sewers. Once down there, an alligator will eat you.

DDD -66%
CREE -48%
YOKU -41%
S -59%
VALE -42%
SLCA -20% (that’s wild isn’t it? SLCA is only down 20% ytd)
PBR -42%

You get the gist and I am guilty of the aforementioned too. We all want to be Carl Icahn, sans the flabby physique and old man head, and catch the next NLFX. Truth be told, our lives would be easier and better if we simply stuck to the sectors that are performing.

Such as:

Biotech
Trucking
Footware
Semis
Software
Restaurants
REITs
Airlines

Each and every year, REITs pay out 3-6% in dividends and return another 15-30% in share price performance, yet most people ignore them. If you’re building a wish list for 2015, take my word for it and cast aside the losers; stick to what’s working.

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