I named my website the Intelligent Speculator as a play on the book The Intelligent Investor, written by Benjamin Graham. Graham is considered the father of value investing and his investing philosophy greatly influenced Warren Buffet. If you read his book you will find that he doesn’t consider speculating a form of investing at all. In fact, he would probably consider the name of my website an oxymoron. While I agree with most of his investment philosophy I disagree with his opinion on speculating. I believe if you speculate in the right manner you can greatly increase your chances for exceptional returns.
So what do I mean by speculating? I don’t mean investing in a pink sheet stock that’s worth a penny and hoping it goes to two cents. That’s just gambling and you might as well go to a casino. I do mean investing in companies that aren’t making money but are heading towards profitability. I also mean investing in companies in anticipation of a good quarter and therefore a short term gain. There are also many other forms of speculating that if done properly can increase your returns.
While I think speculative investing can be beneficial, it is not without risk. I have a very high threshold for risk but most of my money still goes towards solid stocks (stocks that have good earnings and cheap valuations). In fact, the majority of my stock recommendations will not be very speculative at all.
As you will see, I do most of my picks in a very small portion of the investment field, “Internet Technology”. It is the best combination of knowledge/interest for me and one that I’ve had much success with. I took over the website in the fall of 2008 and so while the previous picks were of interest to me, you will see a consistent pattern of technology stocks in all picks since then.
I generally attempt to do 1 new trade per week right now, which gives me time to look over the numbers and charts as well as stay up-to-date on my current positions. I am not yet calculating a return because I have yet to optimize the ideal size for each trade, the risk involved, etc. I will continue to do more picks and decide on those in the near future. Until then, you can enjoy my picks and take them as is.
Of course, there is a disclosure there are is no guarantee that making our recommended trades will give you a positive return and any one trade can go wrong. We do have a stop-loss on each trade which generally will limit our loss to about 20% on a trade but big movements might make it impossible to get that extract exit point.