Buy! Sell! Buy! Meaningless noise, or sound decisions?
For some unaccountable reason, brokerages love to send out press releases outlining the most-traded shares or funds over the previous week or month.
Sure enough, today's inbox contains one from broker TD Direct, a subsidiary of Canada's mighty Toronto-Dominion Bank.
And, as usual with these things, there are laughable -- if eerie -- parallels between the shares that people are buying, and the shares that other people are selling.
Today's list is no different.
The most popular 'buy' last week with TD Direct's clients? That would be Gulf Keystone Petroleum (LSE: GKP). The most popular 'sell'? Er, Gulf Keystone Petroleum, again.
How about the second most popular 'buy'? That would be Lloyds Banking Group (LSE: LLOY). The second-most popular 'sell'? Er, Lloyds again.
In fact, the top six buys are perfectly matched to the top six sells, with only minor differences in ranking -- Barclays (LSE: BARC), for instance, as the fourth most popular 'buy', but the third most popular 'sell'.
And of the 'top 10' buys and sells, only four names out of the 20 shares that are listed fail to be both a top buy and a top sell.
In other words, shares such as Tesco (LSE: TSCO), Xcite Energy (LSE: XEL), Royal Bank of Scotland (LSE: RBS), BP (LSE: BP) and Range Resources (LSE: RRL) are being bought and sold in almost exactly equal numbers.
Split both ways
Now, to some extent, this can be expected. After all, logically enough, if someone isn't selling something, then someone else can't buy it. Which is one reason why I'm always dubious about the value of such lists.
But more to the point, among a supposedly sophisticated retail client base, we see opinion of a share's merits being roughly equally divided.
Is Tesco, for instance, a 'buy' or a 'sell'? People are jumping both ways. Likewise all the other names that appear on both lists.
In short, tables like this tend to reaffirm my faith in long-term buy-and-hold tactics, and index trackers.
People are selling shares that other people think are going to go up -- otherwise they wouldn't be buying them. Equally, some people are buying shares that other people rate as a 'sell'.
An element of de-risking and profit-taking explains some of it, but I suspect much of the rest is just market noise. And expensive market noise at that, as people cough up trading costs and stamp duty for the privilege of holding a view on a share that's diametrically opposed to the view taken by their neighbour.
Better by far, in my view, to pick a clutch of decent shares, and sit back and bank the dividends.
Feel free to share your view in the box below -- especially if last week you bought, or sold, one of the shares I mentioned.
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> Malcolm owns shares in Lloyds, Tesco and BP. The Motley Fool owns shares of Tesco.