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Alpesh Patel's columns :
01/12/2005	What You Need To Know
12/21/2004	Year End
12/14/2004	Of Mountains and Markets
12/08/2004	Strong Dollar Policy and Other US Macho Nonesense
11/30/2004	Irish Eyes Are Smiling
11/22/2004	Oil. Oh it's so last month
11/15/2004	Eat my shorts
11/08/2004	Big Rally Big Fall
10/31/2004	Big Week
10/25/2004	Vacuum
10/15/2004	Dip and dive or dip and rise: 4600, 4700�4500.
10/11/2004	Oil making us boil.
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

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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.

Media Manipulation

06/15/2005

Was it a good or bad day on the market today? You look at the news. Maybe a website or financial TV to get an idea. When I did my weekly show for Bloomberg TV for three years, we would go on air and talk about the market. After a long day, a 7pm show was the final hurdle and we were usually quite happy to be going into the studio. In an hour we would be free. But say the market is down 100 points that day.

'Okay people, let's not look so happy. A lot of people will have lost money there today' the presenter would say.

Hang on a minute. This small trivial example illustrates a broader issue. First, if we're glum, isn't that going to affect how some viewers decide what to do with their investments. Second, since when did presenters become stockpickers? Third, short-term falls will have benefited those who are short stocks, spreadbetting, trading CFDs, so not everyone is glum. Fourth, it is only a day - are we not exacerbating a short-termist view of the market which is exactly what we're criticized of.

I mention this illustration because it depicts a broader problem: the messenger is the message.

Consequently I, like many hedge fund managers, in looking for trading ideas and stock picks will do a news word search. There are certain key words in financial news stories I will hunt for. Those words allow me to determine that I have a good starting point for investigating further whether the stock is likely to rise or fall.

I used the stocks associated with news stories containing those words to pick stocks on the programme on Bloomberg where each week I would have to give a six month 'buy' and 'sell'. When a Bloomberg intern went through my picks - they outperformed all other stock pickers on the channel.

Of course the names of stocks associated with stories containing those words were only the beginning. If 10 stocks were thrown up I would narrow down to the best candidate based on share price trend, fundamentals, earnings and so forth.

What were the words? For bullish stocks they were:

"share soars"
"earnings rise"
"exceed expectations"
"beat expectations"
"director buys"
"upgrade"

For stocks expected to continue to fall: "share plummets"; "earnings drop"; "met expectations"; "in line with market expectations"; "director sells"; "downgrade".

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: Rolls Royce, British Polythene Industries, BAE Systems, MTL.

Remember I am targeting about 20-20% with the value growth criteria. Last year it produced 33% return. On my momentum value indicator I have Aero Inventory, Meggitt, easyJet, Allied Irish Banks, Axis Shield.

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: QXL, Christie Group, Renold.

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.