×

Got a Knack for Stock Picking? It Won’t Help You

Think you’ve got the knack for picking winners? Or maybe you’re terrible at it? Either way, we’re hearing it doesn’t matter.

According to Jim Bianco, the president of Bianco Research stock picking isn’t a skill you’ll need in this market.

”The average stock in the S&P is currently 85% correlated to the S&P itself,” says Bianco. ”That’s an 80-year high.”

In other words, more than 8 out of 10 stocks in the S&P are moving in tandem.

“And the reason it’s happening is that almost every company shares the same fundamentals," he says.

According to Bianco stock specific catalysts don't matter in this market- only macro factors such as the financial woes of Europe and/or the potential of QE3. And they impact most stocks the same way.

That’s not to say there can’t be higher beta or lower beta moves – either bigger or smaller moves than the benchmark - but largely stocks are moving in the same direction.

And the tight correlation may be in place for quite some time.

Bianco thinks the phenomenon lasts as long as government intervention in the form of bailouts or money printing remains a major market influence.

”When that ends I think the correlations disappear but we’re nowhere near that,” he says. ”I expect it remains a very difficult environment for stock pickers for quite some time."

So for the time being – you can just hang your stock picking prowess on the bed post. According to Jim Bianco you won’t need it.



______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.


Trader disclosure: On November 1, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova is long APC; Terranova is long F; Terranova is long AAPL; Terranova is long FCX; Terranova is long CAT; Terranova is long AXP; Terranova is long EMC; Terranova is long IBM; Adami Owns AGU; Adami Owns C; Adami Owns GS; Adami Owns INTC; Adami Owns MSFT; Adami Owns NUE; Adami Owns BTU; P. Najarian is long AAPL; P. Najarian is long AKS; P. Najarian is long C; P. Najarian is long WFC; P. Najarian is long MS; P. Najarian is long INTC; P. Najarian is long MSFT; P. Najarian is long FCX calls; P. Najarian is long F calls; P. Najarian is long PFE; P. Najarian is long MRK; Finerman owns AAPL; Finerman owns BAC; Finerman owns MSFT; Finerman owns GOOG; Finerman’s firm owns AAPL short calls; Finerman’s firm owns JPM; Finerman’s firm owns YHOO short calls; Finerman’s firm owns IBM short calls; Finerman’s firm owns MSFT; J. Najarian is long DB; J. Najarian is long CBOE; J. Najarian is long CME; J. Najarian is long CIGX; J. Najarian is long MDR; J. Najarian is long MSFT; J. Najarian is long AKAM call spreads

For Fred Cannon
KBW expects to receive or intends to seek compensation for investment banking services from MF Global in the next three months. KBW currently makes a market and/or acts as a liquidity provider in MF Global securities

For Jim Bianco
No disclosures

For Tom Porcelli
No disclosures

For Jeremy Wien
No disclosures

For Jake Zamansky
No disclosures

CNBC.com with wires.