| Now where have I heard that before? I know. It | | | | know (and I think you do too) is if they were |
| was my broker. | | | | smart enough to tell you to buy then why |
| So I took his advice and bought some of the | | | | weren't they able to tell you to sell? |
| stocks he recommended. I am still waiting for the | | | | I'll tell you why. Brokerage companies never give |
| 'sell high' part of the equation. Everything he | | | | sell signals because they don't want to offend a |
| touted went up for a while and now it is lower | | | | company that might come out with a public |
| than when I bought it. It is so low I can't bring | | | | offering on which they will make a killing. It is |
| myself to sell it. My capital has shrunk about 60% | | | | better to kill a few customers than miss out on |
| from where I started. That's a lot of money to | | | | several million dollars. You pay commission and ask |
| me because it took a long time to save it. What | | | | for honest advice, but you are being fed |
| happened? | | | | disinformation. |
| The brokerage company that your broker works | | | | Is there any way you can protect yourself from |
| for puts out recommendations almost very week | | | | this nonsense? Yes! It is called a stop-loss order. |
| for various companies listed on the major stock | | | | Brokers don't like them because then they have |
| exchanges. They have simple things like Buy or | | | | to watch your account. He will tell you you don't |
| Strong Buy. Then they have a complex group of | | | | need it as he will watch your account. And pigs |
| words used when they downgrade a stock. It | | | | can fly. The average broker has 300 accounts |
| never goes from Buy to Sell. No, it becomes | | | | and unless you have a large 6-figure account you |
| Accumulate, Underperform, Attractive, Market | | | | will be on the bottom of the pile. |
| Perform, Neutral or some other meaningless term. | | | | Anyone can place a protective open stop-loss |
| If any stock is ever downgraded even one notch | | | | order for stocks. Most are about 8% to 15% |
| sell it immediately. Finally after a stock has lost | | | | below the highest closing price. I recommend that |
| 50% or more of its value it becomes a 'Hold". | | | | each Saturday morning you look in the paper for |
| And you know where you are holding it. | | | | the Friday closing price of your stock and place |
| Last year the brokerage companies gave over | | | | your open stop each Monday morning with the |
| 33,000 stock recommendations to their | | | | broker. As your stock moves up keep raising the |
| customers. Of those only 125 were Sell. On the | | | | stop and you will sell near the high. Never lower it. |
| NASDAQ exchange alone there were over 1,000 | | | | This will lock in your profit or take you out of a |
| stocks that lost more than 90% of their value. | | | | losing position. I can assure you your broker will |
| The "experts", known as analysts, were all telling | | | | never call you to sell. Brokers are not taught to |
| you to buy. Your kid could have thrown a dart at | | | | protect your capital. |
| the Wall Street Journal in 1999 and done as good | | | | This is the only way to buy low, sell high, protect |
| a job as almost any analyst. What I want to | | | | your capital and lock in your profits. |