The Shocking Truth About How Most Investors Pick Stocks

Most investors have no idea what they’re doing.

They treat the stock market like a casino — placing bets on stocks they saw on the news, heard about from a buddy or spotted trending online.

And the worst part?

They make those decisions after spending just six minutes “researching” the stock.

Six minutes. That’s not investing — that’s gambling.

At American Prosperity Report, we do the exact opposite.

We dig deep, roll up our sleeves and conduct over 40 hours of research on every recommendation.

In fact, I’ve been following some of our recommendations — like Microsoft, Alphabet and Apple — for decades.

I know these businesses pretty well because I’ve watched them grow, stumble, adapt and dominate.

When we added Arista Networks (ANET) to the portfolio in March 2020, most investors had never heard of it, let alone understood what it did or who was running the show.

But I had been tracking Arista for over two years.

I knew it was a rock-solid business with a world-class management team — and when the stock traded at a bargain, we pounced.

The result? Arista is up nearly 800% since our recommendation.

The same story played out with KKR & Co. (KKR), up more than 310%, and HCA Healthcare (HCA), which has climbed 280%.

That’s what separates us from the crowd.

They’re Guessing. We’re Researching

A new study by professors at NYU’s Stern School of Business backs up what I’ve seen for decades: the average investor is flying blind.

They looked at “clickstream data” — over 60,000 hours of browser activity and 8 million clicks from regular investors — to see what people actually do before they hit “buy” on a stock.

Here’s what they found:

• The median investor spends just six minutes researching a stock before buying.

• 73% of that time is spent looking at price charts — usually covering just one day.

• Only 14% of the time is spent looking at fundamentals like earnings, dividends or cash flow.

• A mere 1% is spent analyzing risk, things like volatility or debt levels.

In other words, most investors make emotional decisions based on a recent price movement or a flashy headline.

And it’s killing their returns.

Professor Terrance Odean, one of the leading researchers in investor behavior, found that the average stock individuals buy underperforms the ones they sell.

Why?

Because they chase attention — stocks in the news, stocks with a “story, ” stocks that everyone’s already talking about.

But the best-performing stocks? As Nardin Baker — chief quantitative analyst at Wise Responder — put it, they’re “so boring and uninteresting that few if any Wall Street analysts or journalists are drawn to write about them.”

Those are the kinds of stocks we love.

The Alpha Approach is simple — because we focus on businesses, not tickers.

We dig deep into 10-Ks, earnings calls and balance sheets.

We study management teams, understand industry tailwinds and analyze long-term fundamentals.

And we do all of this with one goal in mind: finding great businesses at great prices.

We’re not chasing the latest trend or buying what’s hot today. We’re investing with discipline, patience and fundamental research — over 40 hours of it for every recommendation we make.

We do the hard work so you don’t have to.

So the next time you hear someone bragging about a stock they bought after watching a YouTube clip or seeing it on a Reddit thread, ask them this:

“How long did you actually spend researching the business?”

Then smile — because you know you’ve got a different strategy. A winning strategy.

You’ve got American Prosperity in your corner.

And we’re just getting started.

Regards,

Charles Mizrahi

Founder, Alpha Investor