Jim Collins wants you to pay attention when picking stocks, even though that’s a mindset he says has fallen out of style over the past few years.
What is amazing to Collins is the preponderance of advice that one can find on financial websites that espouses a sort of willful blindness. “You see things like ‘Don't worry about your portfolio, Janet Yellen and Jerome Powell got this’,” Collins wrote recently on Real Money. That’s “hogwash,” Collins says.
Knowledge is power and basic research will get you over the finish line. “If you want to beat the big guys, you should seek out novel sources of information,” he said.
Here are some of Collins’ best ideas.
1. Subscribe to a financial site that provides independent thinkers and veteran analysts. “That means experts like Chris Versace (an old DLJ colleague of mine) and dedicated market trackers like Carley Garner on the commodities front and Jim "The Rev Shark" DePorre on the equities side. That's Real Money, and, obviously, you already consume the content,” Collins advised.
2. Watch the bond market. “I use Bloomberg's rates and bonds page. The bond market is telling you that any Fed let-up in quantitative easing will lead to a significant pullback, and those always precede crashes."
3. Watch commodities. “That's where the stagflation in the current global economy is most evident,” he said. “I check oil prices every morning and many times throughout the day.”