High on the New Lows
In addition to checking sectors, another favorite strategy of mine when shopping for cheap stocks is the daily list of new lows. I know the new-high list is more exciting and has all the trendy, sexy stocks, but that's not my bailiwick. If I was a short-term trader, that would be the first place I look each day -- but I am a long-term investor. I want to buy businesses at good to great prices and hold them for several years. As a bargain-hunting vulture, I want to buy what no one else wants at fire sale prices. Those stocks are on the boring, unloved list each day.
I go through this exercise just about every day. I pull up the new-low list and start scanning it for ideas. There is always a lot of junk on the list and I have become skilled at identifying it and moving on. Today is no exception. I see a lot of little biotech companies that are burning cash and floundering in their research efforts. I have no edge in biotech, so I skip these and move on. I do the same with all the Chinese companies on the list. I have no interest in buying companies based in a nation where fraudulent financials and a hostile government are the norm. There are plenty of gullible investors to buy the China meme. I will pass on all of them no matter how cheap they appear....457 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.