Fly on WallStreet

At the end of every year, I perform a ritual of studying and reviewing every stock publicly traded that closed at or within 5 percent of a 52 week high. I feel strongly that the best stocks will always be found on the 52 week high list, which all investors should study-- in order to get a feel for what is working.

Sure, you can fuck around and make believe you are Gordon Gekko and buy some dog shit stock with hopes of a hail mary turnaround. But, in the real world, find comfort in the fact that other people know more than you. Moreover, the short way to ride their coat tails is by buying stocks on the 52 week high list.

Now, don't get me wrong, I do not suggest buying a stock just because it is at a new high. No siree bob. That would be fucktarded. Instead, start your weeding out process with stocks at or within 5% of a new high. After that, check company descriptions, revenue/growth, gross margins, price/sales, price to book ratio's and competition. Then, after all that, sift through old press releases, read SEC filings and listen to old conference calls.

At the end of your screening, you might just find another HANS or AKAM.

Granted, this screening process will take a long time and is not for everyone. I do it because I am obsessed with finding new idea's and keeping an edge over my competition. However, even if I only ran my own money, I would still do it-- just for the sake of a good treasure hunt.

For example:

Here is my 2005 52 week high list with 2006 performance numbers.

NOTE: Green highlights significant outperformance, while red represents heavy losses.

As you can see, I break stocks down by market caps. Had you did a little research and bought some of 2005's big winners, you might have made some big coin in 2006. Some winners include: AIRM +70%, BITS +125%, ROLL +78%, KNOT +139%, SIGM +71%, ANDE +85%, KNXA +56%, ICON +94%, CLB +136%, GOLD +42%, TCC +92%, ACLI +126%, RTI +106%, WBD +136%, TTEC +91%, BGC +124%, SSRI +95%, OS +110%, FMCN +109%, NITE +101%, TWTC +112%, CAL +108%, ISE +81%, BLS +81% and LFC +201%.

My point: Just because a stock is up big during a year, doesn't mean it is done going higher. As a matter of fact, stocks at 52 week highs tend to stay near highs, barring a fundamental change with the company or market. Furthermore, if you are looking for the "next big thing," it will always be found on the new high list.

Also, it's worth noting, 2005's 52 week low list performed well in '06. Here is the list. Winners include: DTV, FS, CMCSA, NWS, V, DISH and GM. So far, I haven't put together a 2006 new low list. However, looking at my screen data, big losers in '06 include: GSK, MU, RDN, SFD, IMCL, LSTR, FWRD, ABFS, LEND, GGC, LZB, WIRE, TOPT, SOLD, BBA and BF'b.

Finally, here is the 2006 list of stocks at or within 5% of a new high.

NOTE: The 2006 list is incomplete and only goes up to 5 billion market cap. But, you get the idea.

NOTE II: Please take the new "Fly Survey." Are you bullish or bearish on the markets?

# posted by Broker A @ 8:53 AM