Stock Exchange: Experts Disagree On Big-Name Stocks

Last week we highlighted a rare consensus among our models and our guest expert. The result was a very successful pick. Readers have often asked why there is so much disagreement among our models. The essential reason is simple. Each has a different method, and they rarely align.

This week there is no consensus, but several good ideas and plenty of spirited debate.

Review

Our last Stock Exchange, Four Thumbs Up for Nvidia, featured guest expert Cody Willard who joined three of the gang in recommending Nvidia (NVDA). It was the most popular article in our series. We hope that some readers (after doing their own checking) joined in the gain. Some may wonder whether we took profits. Not yet. All the models are still holding, as is Cody.

This Week— Experts Disagree on Some Big Names.

Few stocks are more controversial than Valeant Pharmaceuticals (VRX). Felix is undeterred.

Felix: My newest holding, (VRX) is already paying off. Sure, the chart here doesn’t look like much. At the same time, this position has grown 20% in the week since we first bought in. That small blip in mid-May goes a long way.

Adding this position as part of my long-term portfolio has some sizeable advantages. The odd combination of volatility and a relatively flat trend line create an opportunity for me to monitor growth over months, and pick an exit point at my leisure.

J: I can hardly see the “blip in May.” How about a shorter time frame on the chart?

F: That might be better, but you can see it–on a percentage basis.

J: Do you understand the controversy behind this stock? It is a “poster child” for unfair drug pricing. It was the subject of a famous impromptu CNBC debate between Bill Ackman and Carl Icahn. More recently, Ackman has bailed out on this investment. Are you smarter than they are?

F: Who are these people?

J: They are a couple of the biggest fund managers. People invest billions with them.

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The Stock Exchange does not have all the answers, but it provides good ideas and a stimulus for your own trading.

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