A recent conversation with a man asking for stock-picking advice went like this: After this gentleman asked me for my advice, the first thing I asked him was who he was getting his advice from now. He told me that he got some 'tips' from his friends (one of whom was his barber) and also that his broker called him up occasionally with what the broker termed a good buy. I asked him how well his investments turned out so far. He told me that he hadn't made much money. Without rubbing it in, I pointed out that we were in the middle of a run away bull market. One of the biggest in history. If he was diversified, he should have been making a great deal of money. What he told me was that it was just bad luck. Sound familiar?

What this gentleman was looking for was a particular recommendation to make money on a stock. I told him I couldn't give him one. But I could give him some general advice. And here it is. First, your friends and your broker are the worst people to take stock picking advice from. Your friends don't know anymore than you do. And if one or more has information that is not accessible to the general public (e.g. they work for a law

firm which is handling a possible merger for the firm), the information may be considered insider information. And it's illegal to trade on it.  In fact, it's illegal for your friend even to tell you the information. Otherwise, they are probably no better than you at picking stocks. You also need to be very careful of your stockbroker. Stockbrokers make their money by buying and selling stocks. While they would like all their recommendations to make money, it doesn't matter to them whether their recommendations are profitable or not profitable. All that matters is that you continue to trade stocks with them. If you stop trading, don't expect any Christmas cards from them.

The second piece of information I gave him was that making money in the stock market is not a one shot deal. Money is made through a series of transactions over a long period of time. There will be both wins and losses. The object is to cut your losses short and let your winners ride. Set reasonable stop loss levels and use them. Don't ignore stop losses. Also, remember to use trailing stops. Move those stop loss levels up and stick with them.

B. R. Bowers & Company

122 East Maumee St.
Adrian, MI  49221
Phone: (517) 265-7683
Toll Free:  800-392-6230
Fax:  (517) 264-5095

3225 Walker Avenue NW
Suite 200
Grand Rapids, MI  49544
Phone:  (616) 784-0652
Fax:  (616) 784-0674

Email:  bryan@brbowerscompany.com

http://www.brbowerscompany.com