These articles on top ten stock picks usually appear on legitimate news sites such as CNNMoney, Yahoo news, Forbes, MarketWatch, other places that have an aura of journalistic expertise. Here are some examples: here, here, and here. These articles are generally pretty well written and the recommendations sound like they are based upon sound reasoning. So why am I telling you to not follow this advice?
It is because of the conflict of interest from the authors of these recommendations. Money Managers pay money to be able to recommend stocks at these news sites. Their recommendations are going to be stocks they have in their firms' portfolio. By "recommending" these stocks as the best picks by expert money managers, they hope to bump up retail demand for their stocks to drive the value of their holdings higher.
Think about it, why else would a money manager want to share his/her insights with the public? To give away the secret sauce recipe that made the money manager successful or to get a bump in price for his/her current holdings?
This does not mean you should never buy a stock that happens to be recommended on one of these lists. It means that you should never take these recommendations as gospel. You should actually read it as a sales pamphlet designed to sell you insurance you don't need.
Let me leave you with a good anecdote
Student: How do I make money in the stock market?
Teacher: Buy low, sell high.
Student: Is there any other way?
Teacher: Buy high, sell higher.
Student: How do I do that?
Teacher: Buy the stock, get some respected authority to recommend the stock, then take profit (sell the stock).
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