Old Wall Street vs. New Wall Street

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Investing has always been my passion. The way Wall Street does it has not.

Nearly 20 years ago, I took my first job as a stock broker, excited as can be to help my clients make money by doing what I absolutely love to do – uncover great stocks. It didn’t take long for that excitement to turn to discouragement.

First of all, I realized that most brokerage firms recommended the same stocks, most mutual funds held the same stocks, and most investors owned the same stocks. I was face to face with the proverbial herd mentality, and boy was it ever true. I learned that Wall Street is just too lazy to find the best stocks, preferring to stick with what they know and do what they’ve always done. Their concern is making commissions and getting new clients, which means they are salespeople, not stock experts. I saw up close how investors paid very high fees for “expert” advice, but nearly every investor ended up owning the same 10 stocks!

I took my passion to radio and TV for a while, and when I started my TV career I was privileged to see into Wall Street even deeper. I shared the camera with some of the most well-known investors of the last century. I learned a lot from many of them, but it was still amazing to me that some of the old Wall Street guys would make hundreds of millions of dollars per year – yes, you read that right – and their best stock idea was one of the largest companies in the world that almost everybody owned anyway.

I knew there was a better way, that there was big money to be made outside of those same stocks that everyone had in their portfolios. The next great companies that could make a difference in people’s lives were out there, trading among the thousands of stocks that Wall Street ignored.

Those were the stocks I started to cover, and the ones I wanted my clients in when I started my own financial firm. I see more than ever how this new way of looking at Wall Street is better than the old way. Finding those next great companies also meant going about things differently, so I developed a multifaceted approach that big old Wall Street was too lazy to try – the next generation of investing.

Next-gen investing goes beyond the myopic focus of Wall Street. The big firms settle on one way of researching stocks, and that’s all they do. I equate my approach to a three-legged stool that incorporates 1) fundamentals, 2) charts and technical analysis, and 3) intangibles, catalysts, themes and other drivers that won’t show up in the stock screens used by 99% of Wall Street. I’ve found that this new way of investing increases our winning percentage, keeps our losses infrequent and much smaller than our gains, and enhances our ability to find the next big winners.

Those big winners all come from what I like to call next-gen themes, unstoppable trends that will create more opportunities than Wall Street can even imagine right now because they aren’t looking. Wall Street most often takes what’s called a bottom-up approach, meaning they just look at a stock. As you can imagine, too often they miss the forest that’s right in front of them because they’re just looking at one tree – and it probably isn’t even the best tree.

One of the quickest ways to watch your portfolio stagnate is by not keeping up with the larger stories that are fueling the market’s next moves. I like to call these mega trends, and right now we’re watching some of the most exciting trends in decades play out. Everything from next-gen technology to new sources of energy and even a changing global landscape are creating explosive opportunities that many are missing out on.

I’ll be talking in detail about these trends in future articles, so check back here on the website for much more on my latest investment picks and how we can profit from the next-generation companies that are ready to change Wall Street.


Article printed from InvestorPlace Media, https://investorplace.com/moneywire/2017/04/old-wall-street-vs-new-wall-street/.

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