Lin-Sanity Stock Picking

| February 22, 2012 | 0 Comments

Long time readers know I’m a huge sports fan.  And I’ve got to admit, I’ve been caught up in Lin-Sanity that’s sweeping the NBA.

If you’ve been living under a rock, the New York Knicks’ guard Jeremy Lin is taking professional basketball by storm.  It’s his amazing story, along with his dazzling play, that’s winning over fans.

And believe it or not, there are parallels between Jeremy Lin and investing in penny stocks.

You see, Jeremy Lin was a castoff.  The Asian-American Harvard graduate didn’t fit the stereotype of an NBA player.

He’d already been cut by two NBA teams.  His basketball career was basically over before he finally broke out with the Knicks.

Just like Lin, penny stocks have also been tossed on the trash heap for one reason or another.

No expert thought Lin could succeed.  And most experts think penny stocks won’t succeed either… that’s why they’re penny stocks.

If everyone thought they would succeed, Lin wouldn’t have been cut from another team and penny stocks wouldn’t be trading so cheaply.

However, the Knicks didn’t listen to the conventional wisdom.  They did their own research and found something in Lin that made them want to take a chance on him.

And guess what?

Investors shouldn’t listen to conventional wisdom either.  You need to do your own research.  And when you find a company worth taking a chance on, you’ve got to pull the trigger.

But that’s not all…

One thing that struck me about Lin is his amazing work ethic.  He’s worked for years to get to this point.

And when the chips were down, he didn’t change course.  He didn’t quit basketball to become a baseball player.  He knew he wanted to be a basketball player.  So he kept on working and believed in himself.

Needless to say, that’s a great quality for a stock as well.  A good company shouldn’t be changing their main business.

Sadly, I’ve seen a number of penny stocks who’ve completely changed their business.  They’ve gone from a biotech company to a mining company or a tech company becomes a retailer overnight.

Obviously, when a company changes their business, it should throw up red flags.  I’d much rather invest in a penny stock that’s stayed in the same business and worked to get better.

And best of all, when Lin got his chance, he performed.

Lin got his chance when his coach gave him a shot because of injuries to the guys playing at his position.  And a penny stock will get its chance too.

A business could have a new product like a new drug or some great technology.  Or they could be filling a niche market.  Really, it could be for any number of reasons.

But the key is… when an opportunity comes along, they must take advantage of it.

The bottom line is, Lin-Sanity shows us the keys to success in investing or basketball or life really aren’t all that different.

Now the Knicks are making a killing as Lin soars toward super-stardom.  And penny stock investors can too, as long as you know what to look for.

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Category: Penny Stocks

About the Author ()

Corey Williams is the editor of Sector ETF Trader, an investment advisory service focused on profiting from ETFs and the economic cycle. Under Corey’s leadership, the Sector ETF Trader has become one of the most popular and successful ETF advisories around. In addition to his groundbreaking service, Corey is the lead contributor to ETF Trading Research, where he shares his insights about ETFs and financial markets on a daily basis. He’s also a regular contributor to the Dynamic Wealth Report and the editor of one the hottest option trading services around – Elite Option Trader.

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