Long-Term Investing

10 Stocks

Ha! everyone has a “10 stocks to buy” list. Here are some stocks of the moment (summer 2006 to present):

Nobody buys all the recommended stocks, and how do we even know whom we can trust? After all, it’s all personal opinions. Granted, opinions based on some sort of research, often in-depth, but still not without subjective bias. It may be useful to cross-reference the recommendations and see if some of the companies make it to several lists at the same time.

Here’s a very old list “10 Stocks to Last the Decade” – August 2000. Before the horrific tech bust and the scandals of 2002. This is a very sobering read, and further proof that all the lists are just some personal opinions, and nobody really has the crystal ball. Nortel (was recommended at $77 a share and with P/E 114?! What were they smoking?!) and Enron are on the list, among others. Would be funny if it weren’t so sad – I’m sure some people bought these stocks based on this recommendation.

If stocks you bought based on media and analyst recommendations lost you money, that would be like buying “as seen on TV” products. In the end you always feel like you fell for a scam, even though nobody forced you to do anything. I’m not saying there’s no validity to the “lists” at all, but take them with a spoon of salt.

I still enjoy sifting through the Wall Street Journal data tables. Everything I pick from those pages does quite well. Maybe it’s the calm ritual of sitting down with the newspaper, or just seeing things in print – always easier to make the right choices that way. I hope newspapers never die.

Any investor would better be served by reading a few good investment books, and skipping the Top 10 Lists entirely. This is what I’m doing, and any mistakes – they’ll be mine, I’ll live with that.