Do you invest in stocks? I have been doing so for years, but I’m paying a lot more attention to my investments these days. I created an algorithm for picking the best stocks based on several factors. But, one of the most important factors was something I overlooked at first.
I see a psychic regularly, and he is able to channel departed souls as well as living human beings. Since I believe that Warren Buffet is the wisest of any investor I’ve ever heard of, I decided to channel him for stock guidance. Rather than just asking him what stocks he likes, I asked his consciousness what factors he thought were important that weren’t in my algorithm.
My stock algorithm takes into consideration P/E ratios, stability of earnings, equity ratios, growth rates, dividends, credit ratings with S&P, longevity of the company, and more. But, I felt that I must be missing something.
Stock Tip #1 — company culture
Warren’s consciousness told us that the company culture is very important, especially of the management. As an investor, you cannot get to know the management of a company just by reading about them which puts you at a huge disadvantage. But, he said that some of the companies I was interested in had a bunch of narrow minded old guys running the show and that they would probably run the huge company into the ground. It was more than 100 years old, more in debt than any other company of its class, and with a mediocre credit rating as well. It’s sad to see such a huge and well established corporation look like it will go under in the next 20 years, but that was the reality that I was seeing. So, the answer was obviously not to buy a single share of it.
Stock Tip #2 — intuition
This next tip came as somewhat of a surprise to me. But, Warren’s consciousness told me that I need to trust my inner feelings and intuition when picking stocks. Coming from a great investor from a Western culture, this came as a surprise. But, maybe this is a good idea. I actually used my intuition a bit before when picking bonds. I had a great feeling about Coca-Cola’s future just like Warren does. But, I didn’t like something about Johnson and Johnson. Warren Buffet doesn’t own any JNJ stock, but I have 15% of my investment money in JNJ. I feel they are a stable company, but something is just off in my feeling about them. Wells Fargo had a wonderful feeling about it. But, the company where I felt best is Starbucks. Starbucks is much smaller than the huge conglomorates I usually put the majority of my cash into. They are a little fish that could get out-done by a competitor or bought out by a conglomorate in the food industry such as Proctor & Gamble or Kraft Heinz one day. But, I can’t deny this feeling of enthusiasm and growth potential that I feel.
So, should I trust my feelings, or just invest based on what the numbers are telling me?
I decided to let my feelings be part of my algorithm and represent up to 10% of the points awarded to any particular stock.
Good idea?