Jun 11, 2008

Follow the Big Money To Big Profits

By Andrew Mickey, Q1 Publishing

I was watching Italy lose to The Netherlands in the Euro 2008 tournament a couple of days ago when a BBC analyst commented dryly that Italian centre back Marco Materazzi, “needs to be better”.

This reminded me of the oft-repeated advice to investors to “Buy Low - Sell High”.

Materazzi knows that “being better” would be a good strategy - but easier said than done.

Retail investors (regular folks like you and me) want to “be better” and “buy low” – but unfortunately the majority of investors have difficulty doing this.

The most successful investors have disciplined themselves to think and act counter-intuitively, by positioning themselves in stocks that look weak (undervalued) and avoiding those that appear strong (over-valued).

What can investors do to change their psychology and profit from this simple formula that is so easy to understand, and yet so difficult to execute?

The answer to that question could - and does - fill volumes.

But there is one under-utilized strategy that will radically increase your chances of picking a winner.

Find out where the BIG money is and place your bets on them.

As it so happens, the exchange requires “Pro Group Participation” (Brokers, Fund Managers or Analysts) to disclose their financial interest in a company when they participate in a private placement or financing. This public document tells us retail investors who the big players are, and what companies the big money is flowing into.

A perfect example of this is: Tirex Resources (TXX-TSXv).

As you can see from the chart, this stock was trading on average 150,000 to 350,000 shares per day when it was trading from $2.50 to a high of $4.17 per share.   The Company announced very impressive drill results during this time.  According to the Casey Rock Calculator the 4 announced drill holes have average gross metal value of $259 per tonne over very mineable widths.