Avoid Media-Preferred Securities

Media-preferred securities lists are good for filling space in newspapers, magazines and blogs. They make good reading for investors thinking of ideas.

Those lists do little for investors because those who devise lists are usually off the mark.

It’s very difficult to pick securities that are going to go up in a short time. Top executives in the companies themselves know little about how well their corporate securities will do in the marketplace, where conditions other than their company’s fortunes affect market value. How can you depend upon an analyst working from a perspective outside the company?

That is why index funds so often outperform managed security portfolios. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewHole tweets.)