Sidestep the Dangers of Big Stocks
More than 90% of the investing population has a built-in advantage with respect to the stock market. I would guess that out of that 90%, three-quarters fail to exploit that advantage. The vast majority of investors are not constrained by size; the capital they work with allows them to invest in whatever size company they choose. Despite this ability, many investors find themselves focusing on the biggest, most widely held stocks.
There's an inherent disadvantage in buying the biggest, most highly valued companies: So many investors and analysts are watching these companies that you will rarely be able to purchase shares at a discount to intrinsic value. I realize that after reading the last sentence, many are going to scoff at my assertion and point directly at Apple (AAPL), the biggest and most valuable company in the world, and the returns it continues to generate. Guess what? Apple shares ain't cheap. They aren't at nosebleed valuations either, but anyone who buys Apple today is buying purely on the hope that it will continue to generate extraordinary earnings growth....421 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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