http://profitabletradingtips.com/profitable-trading-tips/trading-with-an-informational-edge
Trading with an Informational Edge
Trading with an Informational Edge
Stock traders commonly use technical analysis tools to trade large cap stocks. These stocks are covered by many analysts and there is little that you know about the stock that others do not. On the other hand many cheap small stocks are not followed by anyone. Here is where you can be trading with an informational edge as noted in a useful article in barrons.
because large-cap stocks are extremely well covered by wall street, it’s hard to gain an informational edge on them. however, smaller stocks can provide big upside to intrepid investors capable of navigating the riskier terrain.
one such money manager is david daglio who has ventured off the beaten track and established a record of unearthing attractive small- and mid-cap value stocks that beat the market. he has done so by focusing on the long-term value of businesses and calculating their intrinsic value.
as head of dreyfus’ opportunistic value team, which runs the $985 million dreyfus opportunistic small cap fund (ticker: dscvx ) and the $2.4 billion dreyfus opportunistic midcap value ( dmcvx ) fund, daglio digs deep into businesses he believes haven’t been well covered by wall street. he and the core of his 10-person team have been with the funds for a decade.
results have been strong for both funds. the small-cap fund returned an annualized 22.1% over three years, versus 18.2% for the russell 2000 value index, and an annualized 10.9% over 10 years, compared with 8% for the benchmark.
The point of this being that you can make money trading with an informational edge.
4. http://profitabletradingtips.com/profitable-trading-tips/trading-with-an-informational-edge
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