When does a stock story get old?

When does a stock story get old? When is it too late to get into a stock because the story is 'in the price'? That is one of the key dilemmas facing many investors. There are those, let us call them the paranoid, who believe any story they here must be priced in and so it is always too late.

Consequently they would not have bought BHP Billiton when I picked it in 2002 on Bloomberg and doubled their money.

Then there are those who will only buy a stock off a story if they hear it from private not public sources. So, if it is in a newspaper or website- it is too public, but if it is overheard from a man and his dog in a pub, then that means it is a good stock tip.

Finally, there are those who simply will always defer, albeit hesitantly to the 'expert', 'guru', 'pundit'. And buy into any tip, without a second thought to the warnings, cautions that may go with that pick. They would have loved my January BBC2 stock picks also mentioned here which are up 10% in 6 weeks (around 87% return annualized).

(By the way, in case you have not been following these writings as closely and profitably as you should then they were: (Speedy Hire, Gooch, DTZ, Findel, Vp, Marchpole (last one is the only one that is down - but offset by others))

So what do you do? Well, you look for good old fashioned criteria for stock selection first and put the story second. So for instance, I mentioned on BBC2's Working Lunch this Wednesday, I like BHP Billiton still because of China demand, but I really, really like it because the fundamentals of valuation and growth stack up.

Similarly, I like Reuters (belatedly I know, sorry) (less so by far than BHP) because cost-cutting proven, but revenues being hit. And I like Standard Chartered because of China but worry about valuation and banking risks. So sift the story from the fundamentals. Speaking of fundamentals…

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: Hitachi Capital, Barclays (a new one), Chamberlain and Hill (also new).

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: Manchester & London, FirstQuatum, BFS, Bristol Water.

Bids

For those who like to look for bid candidates - here are my estimations: Lastminiute.com, Colt, Big Food, Logica and Avis - we shall see.

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: Walker Crips Weddle, Vislink, Minorplanet, DRS.

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

Spreadbetters

Spreadbetters and futures traders often look at hard and soft commodities. Here's my quick take on the action for the week ahead:

• Oil: Mixed
• Copper: Mixed to higher (good call from last week)
• $/£: Higher
• Dow: Higher
• Gold: Higher
• FTSE 100: Higher
• Soyabean Oil: Flat