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Alpesh Patel's columns :
09/27/2004	The Trends Re-Appear
09/27/2004	Oil
09/21/2004	No Retail Therapy Here
09/14/2004	Do you feel lucky punk?
08/23/2004	The Market Wants To Move Higher
08/17/2004	August a good swing trader's month
08/06/2004	Where are the jobs?
08/02/2004	August a good swing trader's month
07/26/2004	Takeovers abound
07/19/2004	What does Branson tell us?
07/12/2004	Well valued FTSE?
07/02/2004	Well hello July
06/28/2004	Summer aint bad
06/21/2004	The Real Hot Stuff
06/04/2004	Not bad at all
06/01/2004	May was better than April, hows about June then?
05/21/2004	Broader Market View
05/14/2004	Interest Rates or GDP?
04/30/2004	The Run Up To May
04/23/2004	Some Big Picture Views
04/16/2004	Growth Spurt or Splutter
04/13/2004	The interest in Interest rates : beware and prepare.
04/07/2004	Pick a Direction Already
03/26/2004	After Gordon's Words
03/24/2004	Hidden Opportunities
03/10/2004	Hidden Opportunities and Big Momentum
02/26/2004	So Much Uncertainty
01/13/2004	The Resolutions
01/02/2004	The Year's High
12/22/2003	Slow down or Ramp up?
12/16/2003	Xmas Rally or Not?

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Alpesh Patel – A weekly look at market opportunities and pitfalls

Alpesh B. Patel is one of the UK's best-known traders and financial journalists. He writes a regular column for the Financial Times, has written seven bestselling books on trading, and makes regular television appearances for Bloomberg, Sky Television, Channel 4, The Money Channel, and the BBC.

Itchy Teeth

02/25/2005

When should you buy the stock a company whose products you purchase, whose store you visit and it's the busiest store on Regent Street on a Sunday, whose check-out counters have long queues and there is no one else to buy the stuff or even a comparable substitute from? What if as you walk around you ask the following stock-picking questions and all the anwers are affirmative :

does it have a near monopoly?
are customers enthusiastic?
can it cross-sell more products?
does it have a strong brand and brand loyalty?
is it difficult to substitute something of comparable value and quality?
is it becoming ubiquitous?

Warren Buffett believes in trying and testing the product before buying into it. Luckily, I am a holder in the stock of the company about which I am commenting - the mighty 'Apple'.

For the stock-adict, they get a tingle in their spine and their teeth itch when they see a company like this. It is a bit like the feeling angel investors in companies must feel when their investments come to fruition. But they get 33% return on average annually. Apple, no start-up, just gave you 100% in a year.

Then there is RIM (Research In Motion) the makers of Blackberry. Similar story. Although I don't pick stocks this way, and I had nothing to do with my becoming a holder of Apple stock, nevertheless it is a compelling way to pick stocks if you have a day job and are just too harassed and harranged to read through accounts and the like.

Of course you should still read company news on websites like ADVFN.com or InvestingBetter.com and set 'stop-loss' exit points. And yes this is a 'light-weight' way to invest, but it ain't have fun when the teeth itch.

The recent market falls on oil prices are some excuse for short-term traders to profit-take, and longer-term value investors to buy. Value will only be eroded if the oil price hits earnings and at the moment there is no sign of that.

Value-Growth

On my value growth criteria which are based on stocks meeting revenue and profit growth and good value based on criteria such as price earnings growth, the following names come up. Remember they are for a 6 month outlook: Hunting, Paragon Group, Kier, Rio Tinto, Nord Anglia Education, Chamberlin & Hill.

Momentum

Looking for the pure momentum price plays, ignoring value and growth for a moment the strongest trends are in the following and are worth examining: BodyShop, Morgan Crucible, Somerfield.

Crazy Small Stock

These are high risk volatile stocks which could move sharply higher or move sharply lower in my view, but will almost certainly not stand still. Names on the radar include: Broadcastle, Dewhurst, Theratase, Carlco.

Also, if you would like a free multi-media CDROM on 'Investing Better', which covers spreadbetting, CFD trading and momentum indicators like the MACD, posted to you then drop me an email with your postal address to alpesh@tradermind.com.