Built for Destruction

As much as I enjoy searching the dark corners of the market for stocks to buy regardless of conditions, it is just as important to identify stocks to avoid. This is especially true now, when there are still substantial market obstacles ahead. I do not think earnings season is going to be particularly robust, and the debt ceiling will no doubt create political fiascos and comedies. Even more disconcerting, mutual fund inflows hit the highest level since 2001, and hedge fund leverage is the highest in four years. This type of buying after the 9% move since mid-November is a little scary for a natural contrarian like me.

I am not saying to run out and sell all your stocks. I have never done that and I base my decisions to sell a stock on fundamentals, not market moves. There are sectors and stocks, however, that should be avoided as the valuation and business prospects imply substantial risk no matter what the market does this year....556 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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