Jeo

George Zou (aka:Jeo) is a contrarian. He considers himself to be a critical market watcher, who looks to the Wall Street analyst community for cues and bull/bear signals. In making his picks, George explained that his criteria consists of a few variables. This Simulator player checks if the trend is currently up or down, what the short interest may be, what the analysts are saying and whether or not a stock is from a strong or weak performing sector.

George’s contrarian style and disciplined screening strategy has helped him put together a Zacks $100K Challenge portfolio that currently garners an overall return of approximately 34% since the start of the year.

This challenger’s portfolio currently holds companies like Cooper Tire & Rubber Co. (CTB - Analyst Report), Echelon Corporation (ELON - Snapshot Report), Grupo Simec S.A.B. de C.V. (SIM - Snapshot Report), Uranerz Energy Corp. (URZ - Snapshot Report) and USEC Inc. (USU - Snapshot Report) to name a few. Click here to examine this player's entire portfolio. Check out his complete trading history by clicking here.

How does he do it?

George illustrated how his contrarian strategy often includes analyst coverage by stating that his decision to invest is based on pessimism from Wall Street. “My decision to get into a stock is mostly based on a decent amount of lingering pessimism for a strong performer,” the successful investor commented. “For example, CTB has been a strong performer, gaining 108% in one year, yet the street is stubbornly negative on it. Short interest is still at whopping 10.2%. Of all six analysts who follow it, only one awarded it a buy, four gave it a hold and one sell. The continued strong performance will force these bears to change their mind, thus pushing the price higher.

Any winners?

The Zacks $100K Challenge competitor touted Jos. A Bank Clothiers Inc. (JOSB - Snapshot Report). This contestant again pointed out how less than positive sentiment from analysts gave him more confidence to invest. George said he bought the stock in late March at $34.59 per share. He pointed out that it was already a stronger performer at the time, repeatedly setting 52-week highs.

George mentioned that with such a strong performer, one would think that everyone on Wall Street should jump on the bandwagon, but the was not the case. George said, “Most analysts were quite negative on the stock. Even when the stock was in the new high territory, there were only two out of seven analysts who award JOSB a strong buy, others were just hold ratings. The stock stands to gain from potential upgrades from those holds. Ironically, on April 18, First Albany downgraded JOSB from neutral to sell.” The Simulator participant added that JOSB continues to buck the trend higher. It hit the $42 area a few weeks after the downgrade.

How does he know when to sell?

”When a stock is up more than 20%, it is time to tighten the stop-loss; in case there is material changes with the company, such as earnings, analyst ratings, press coverage, etc.,” replied George.

Where will the market be at year-end?

Being a contrarian for this stock picker translates into being a bull. He noted, “The market will continue to surprise suspicious bears. I see Dow at 1480 by year-end.”

Any words of wisdom for the market novice?

The market enthusiast explained that investing is more of an art than a science. “That’s why everyone invests differently, and with style. However, the ultimate test is the return at the end of the game. One needs to study how the market works and why. Do not expect a windfall return overnight. Do your own due diligence. Respect the market and act accordingly,” stated George. “In addition, avoid the first 15 minutes’ temptation at the market open. Wait till everyone calms down before placing your orders.”