Top stocks for 2007

The beginning of new year brings out the worst in forecasters. Every business/investor magazine has some sort of forecast on likely market directions. Then there is growing list of 10 stocks to buy for 2007 kind of nonsense. There are even books talking about best stocks for 2007.

Now if you see the last year predictions of same magazines, they have horrible results. Most of the gurus who offer these picks or market forecast don't make their living trading stocks. But every year magazines go through the motion. Why, because it is good business for both the magazines and the gurus.

I can predict with certainty that the best performing stock in 2007 will be some unknown stocks at the beginning of year, not on the radar of any market pundits they will be stocks like GROW, AXR, AMAG, IAAC, IIG, CRVL, JST, IAAC (all these stocks up 300% or more in 2006) .

Every week I get emails from readers asking what do you think of XYZ stock, should I load up on this stock. If they are techies, they will ask about tech stocks, if they are in some other profession, they will ask about stocks in that industry. Or ask about stock which is in news. If they are Indian, they will ask about INFY, if I charge 1 dollar for every time I am asked about INFY, I would not have to even trade! Charging 1 dollar for every time I am asked are you a software engineer would beat the bonuses of some Wall Street traders!!

Every time I get the question I always tell people focus on specific methodology not stock. Only 4-5 people get what I am saying and have gone beyond the stock picks to look at specific methodologies. They have asked relevant questions, put together some sorts of system of their own based on few hints and concepts I discussed with them. They no more ask about specific stocks but most of their questions are about methods and concepts.I have exchanged 100 of emails with some of these people, they had their share of frustrations and challenges. Some of them are clearly doing extremely well(You know, who you are). Some of them have helped me improve on my original ideas. Some have better results than I have with similar concept.


You can still ensure that you are in the top 20-50 best performing stocks in a year, without listening to any guru. Stocks come and go. What is critical is methodology. Methodologies are evergreen. The stocks they pick keep changing, but if the foundation of the methodology is sound you will get in to best stocks.

The biggest winners in a year come from unfamiliar, unloved, untracked,and unknown stocks. They are seldom well known names.


Surprises on such names, leads to market discovering them. Those surprises might be earnings acceleration, sales acceleration, new products, surprise shortage in that industry or any other surprise. Neglect, surprise, and small float are three main things which leads to dramatic price rises.

Methodology is most critical. Profit is an outcome if you have right methodology. Once you perfect one methodology, you find building others is child play. If you build a methodology you might be surprised by what you can make in 2007.