Avoid financial press stock picks at all costs

Former Wall Street analyst Henry Blodget writes on Slate that the stock picks that are now being touted by financial publications for 2007 should not be believed – if anyone actually still looks at these picks while investing.

Blodget wrote, “Whatever you do, do not buy the 10 Stocks To Buy Now, at least not because you read about them in some magazine. If you want to buy the magazine, fine, just don’t buy the stocks.

“Why not?

“First, because the only reason to buy individual stocks instead of funds is to try to beat the market, and there is no evidence that magazines are any better at selecting stocks that will do this than anyone else.”

Later, he added, “Common sense and anecdotal evidence, meanwhile, suggest that professional magazine editors are probably worse at picking stocks than professional money managers, if only because money managers pick stocks for a living and magazine editors don’t. (Who would you rather hire to kick a game-winning field goal for your football team? A professional place-kicker or a sportswriter?)”

Read more here.