Catching a stock as it becomes more and more popular is similar to catching the right wave when surfing but its equally satisfying. The essence in both cases is identifying well in advance which waves are worth riding on.
How can you pick potential winners from an ocean of mediocre stocks? One helpful tool is to watch for upgrades by investment companies like JP Morgan, Merrill Lynch etc. Theres a reason why these companies are so profitable. These companies dont just buy equity. They scrutinize stocks, companies and sectors all day long. They know the ins and outs of the market and are very aware of investor psychology.
Another way could be looking at recent upgrades awarded by investment newsletters. That’s because the editors of these newsletters have proven to also be incredibly sensitive to subtle shifts in investor psychology about particular market sectors and specific stocks.
So it’s worth paying attention whenever a stock quickly rises in popularity among investment companies and newsletters.
If you are uncertain, paper trade upgrades for a while to see for yourself. But also be aware of which companies are being upgraded. Most...