I got an interesting and thought-provoking comment from a reader the other day.

He stated:

“Chris,

I’ve enjoyed your commentary and analysis so far, but this comment is a bit over the top especially after SBDT and GEOY earnings results the last couple of days…

“Almost every company that I cover usually always meets, and more than not, BEATS estimates, and ups their guidance, and therefore, it is more prudent to buy the shares before that happens.”

As the great Paul Tudor Jones said, “Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead. Play great defense, not great offense.”

Just food for thought.

Mexx”

Food For Thought Indeed!

The reader brings up an interesting point and one that I wanted to address.

The biggest reason that I started PeakStocks.com was to help people, myself included, get ahead of moves in the stocks that I follow, NOT react to them once they’ve happened.

Have you ever noticed how analysts always upgrade a stock AFTER the pop, or downgrade it AFTER it declines?

Yea, that pisses me off too..

I always say to myself: “Where were they a few days before the pop to tell us that this was a good buy?”

Or my favorite, is when analysts come out after a stock has been hit hard and has declined by 50% and THEN they downgrade it!

Lovely…that’s really helping out the average investor!

Everybody Now: You Can’t Time The Market

All of which leads me to the basic point that I’m trying to make.

Because I never liked this practice, and always thought that analysts or stock pickers in general always tended to follow the crowds and have no backbone or forethought, I promised myself before I started this site, that when the time came, I would always get ahead of the curve, trust my hard work, diligence, passion, instincts and research…

That means taking risks…and it also means looking quite bad on occasion when I am dead wrong.

Is that ego, or guts? Maybe a little bit of both…but I would rather stand behind my picks and be wrong, than hide behind the fear of being wrong and never act!

I disclose full well the risks associated with owning or buying any stock that I recommend or talk about, and I put my money where my mouth is and always buy the stocks BEFORE I recommend them to you as proof of that conviction.

Sure, sometimes I make some outlandish comments to get people’s attention, but it’s never to show bravado or be cocky, it’s just my conviction and passion at work.

I have certainly eaten many doses of humble pie since I started PeakStocks.com and I am 100% certain that I’ll be eating them again as the years go by.

When the companies I follow, because they are so small, miss any kind of estimates or look weak in any way, shape or form, look out below.

But remember, the same is true in reverse! Once people feel satisfied, and by people I mean Wall Street, that these companies are “safer” and have proven themselves, everyone and their mom will want to get in on the action.

But that’s when we’ll already be in!

You see, one of my founding principles, and the reason why I specialize in picking micro-cap and small-cap stocks is to get in AHEAD of the crowd, or in the case of some stocks, after the crowd has panicked and left them for dead.

Bottom Line

What I do is risky and if my picks aren’t right for you, I completely understand.

I don’t see too many other websites like mine where the CEO puts his own money in the pot, takes the risk to shout out to the world what his research and instincts have shown him, takes action on it, and then stands behind that conviction.

Don’t get me wrong, I am NOT into losing money!

I am also NOT into gambling or taking unwarranted risks.

That’s why I create thorough and complete research reports and back up every single investing decision on solid research, analysis, and in-depth breakdowns of the companies that I recommend.

Let me put it a different way:

How many websites or analysts are ever truly putting their reputations and stakes on the line by recommending such small and potentially volatile companies as I do?

How many analysts stick to the big names to hide behind the trend? How many times have you heard someone say that Wal Mart is still a good investment to this day?

Ok, how many out there believe Wal Mart will EVER double in price again, let alone within the next 1-2 years?

That’s the exact point I’m trying to make.

Let’s revisit the quote from my reader:

“Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead. Play great defense, not great offense.”

I agree with everything except the final part!

Investing in Wal Mart is akin to playing great defense…you’ll NEVER beat the market playing great defense over the long term.

That’s not the type of investing I’m ever going to do, at least with the risky portion of my net worth.

I want to get ahead and take it to the defense, and beat them at their own game. Saying that it’s better to play a great defense implies we should be passive, and react, and never try and get ahead of something.

That’s a losing proposition, especially in a volatile market!

You don’t stake your reputation on the tried and true.

You stake your reputation on the underfollowed, undervalued, and little-known.

Whoever told their friends and family to purchase shares of Wal Mart in the 1970’s, now that guy can talk some smack and say he put himself out there on a little-known and little-followed company that hoped to change the way people bought and sold merchandise in America.

So, the long and short of it is, whether you agree with my picks or not, and whether I am right initially in my picks or not, the simple fact remains that I will never hide behind the black curtain.

If I did the homework, talked to management, made calls to competitors and customers, and did all the thorough analysis and due diligence that was in my power to do, and I was still wrong, so be it.

I can lift my head high with pride knowing that over time, I will be right way more than I am wrong, and that over the next 5-10 years, the track record that I will establish will do all the talking for me.

Putting My Ass On The Line: Ego or Guts?

You decide.