Monday, June 26, 2017

Don't  Invest  With  Hedge  Funds


I am sure I have struck a nerve with some hedge fund managers with my heading.  I expect some of them to shoot me an email or respond to this blog defending their case.  That is OK by me.  Some Retail Investors who have invested their  401K's  and retirement monies in a mutual fun will be offended by this post too but I want to share with my readers the data I have.  Hopefully it will be an eye opener for most of you and hedge fund  professional managers. 

Some of you who know me very well in person or those of you that have interacted with me online know that I have been an avid reader of   "Barrons"   magazine for over a decade.  I trust the data they have because it is very well researched.  On June 19th, they published a list of 100 top hedge funds and their performance details.  What struck me was that in 2016, the average performance of these hedge funds as compared to the general broad market as measured by  $SPY  was:

  • Hedge funds ... +11.74%  (not including their fees)
  • $SPY            ... +11.96%  (no fees)

Excuse me!  Why would you want to invest your portfolio with a hedge fund if all they can do is worse by   - 0.22%   than what the passive investment in the general broad market?  You all should be asking this question.   To add insults to the injury, they have the nerve to charge you a fee of  +1%  to  +2%  of your account for handling your account.  If you have a portfolio of  $100,000  You are essentially paying them  $1,000 to  $2,000 to help you  lose  money.  Get smart and fire your hedge fund managers and instead spend that money to get educated by a successful mentor.

Growth  Stocks  Investment  Will  Outperform 


I am a Growth Stock Investor and a Trader utilizing a proven method prescribed by   Mr. William J. O'Neil (founder of Investors Business daily).    If you follow his system, you can outperform the market   2  to  2.5  times better.  It's a system with a lot of rules though.  You have to take the time to learn the rules the hard way with trial an error doing it yourself or you can enroll in our mentoring program to get you up and running with confidence.  It is a set of skills where you learn to:

  1. Identify the leading stocks in a leading sector.
  2. Identifying the  "Goldilock Zone"  as a buy area.
  3. Understanding the conditions of the market and the right time to execute an entry.
  4. Learning to get out of the stock at appropriate time to mitigate losses.
  5. Harvesting profits according to your Trade Plan.

Virtual  Trades


In my mentoring program, one of the things that I have my students do is  "Virtual Trades"   These are the trades that you execute on a virtual platform of your brokers.  There is no money at risk and you are placing these trades as if it is done with your real money except it is done with virtual money.  This is to help them practice,  just as professional football players practice in the field or pilots training in a simulator.  Here are some trades that you  can place Monday June 26th as   "Virtual Trade"   to help you sharpen your skills of trading and help you evaluate your own performance.  They may not all get filled on Monday but you can continue to place them every day this week until they get filled.  Look over my Twitter @spotlightamin  for any updates that I may have on these trades.  Plan for  +10%  for profit target and  - 4%  as a loss target

  1. $STMP ... Entry $146.70 
  2. $GRUB ... Entry $ 46.50
  3. $HQY   ...  Entry $ 51.50
Don't ever chase a trade.  Have your rules for profit exit and loss exit defined like I have done here and abide by them.  I will update you on these trades on my tweets when I see it appropriate.  You don't want to hold onto these trades during the earnings report.  You want to exit prior to earnings if none of your targets are met.

Mentoring  Service

Now is the perfect time to enroll in our mentoring service.  We have very few spots left for July.

Contact us at:

investorspotlight@gmail.com


Schedule a FREE 30 minutes of  "Discovery Call"  with us. Learn how best we can coach you and mentor you to help you out perform the market.  Get rid of your hedge fund managers and invest in yourself instead.

Happy Trading!

Amin





        

Sunday, June 18, 2017

How Did I Know The Market Was Going To Tumble on  Friday June 9th?


Actually I did not know that.   No one can predict what the market will do on any given day.   There will be some out there that will claim that they can accurately predict the market tops or the market bottoms.   I strictly go with what the data shows on any given day and hold back any of my biases or feelings about the market.   I don't listen to anyone or postulate what causes the market to move in any given direction.   I leave it up to the commentators in the media to comment on that.

I am strictly a  "Growth Stock"  and  "Trending Stock"  investor and a trader.   They tend to outperform the general market by 2 to 2.5 times using   $SPY  as a gauge for the performance of the general market.   There were plenty of warning signals flashing at me when I scrutinized the stock charts of leading stocks and sector etf's at the end of the week on  5/26.   There were certain clues that alerted me to be defensive in my approach to the market.   I was fortunate that it was the labour day weekend and I had one extra day over the week end to analyse the market data.   I will share with you some of the data points that I utilized to have trailing stops - when the market opened on Tuesday May 30th - on 38 leading stocks.   They were revised upwards as the market continued to move higher.   This was a defensive measure on my part to lock in the profits and raise  CASH  immediately.   

My Interpretation of the Data a Week Prior 


My routine every weekend is to look at the performance of the 3 major indexex  -  $DJI, $SPY  and  $QQQ.   I also look at the performance of all the 9 major sectors to identify the leading sector.   The reason why I do this is because I am always looking at the best stock from the leading sector in a leading index.   As a Retail investor, I only want to be involved with the best of the best Growth Stocks.   I don't ever plan on holding that stock for the long term.   I just  "Buy High and Sell Higher".   I harvest profits of  +10%  to  +20%   and move on to the next stock.   It may be the same stock too sometimes in which case I will use trailing stops to continue to build extra profits in that stock.

What got my attention analysing the market trends over the labour day weekend was:

  1.  $QQQ  was the leading index   + 3.78%  since the last distribution day on   5/17
  2.  $XLK   was the leading sector  +3.26%   since the last distribution day on   5/17
  3.  $XLU   a defensive sector was  +3.29%   since the last distribution day on   5/17
  4.  $XLI    dividend paying large cap stocks (not growth stocks) was  +3.37%   since the last distribution day on  5/17
Wait a second!!!   What just happened?   Did I see a dinosaur (institutions) just walk by that left a huge foot print and a pile of doodos for me?   They account for  80%  of the total volume of trades on any given day.   They just left a clue for me that they are rotating out of the leading stocks (Tech Stocks in particular) and parking their money into dividend paying stocks.

Is it any wonder why I adjusted trailing stops on all those 38 winning leading stocks on Tuesday morning?   These are the stocks that were appearing on My Watch List since April 24th when the   "Market was in a Confirmed uptrend".   I had tweeted and suggested trailing stops on Tuesday and tweeted revised ones the next day as well.   I also tweeted that I was completely out of  $QQQ   position on Tuesday to stop the bleeding.   I am glad I did  that, although so many of my readers suggested that I got out too early because it rebounded slightly the next day.   That may have been the   "Dead Cat Bounce"   but fundamentally there has been a lot of technical damage done to the Tech Stocks.   We all have to be very defensive next week.   Have patience and let the market rally for a couple of days before making a major stock buy.   Any position that you do decide to take, make sure it is a very small position to start out with until the stock proves itself that it is worthy of your investments.

Mentoring Service

This is a perfect time to enroll in our mentoring program.   Market usually takes off in mid October.  You have 3 moths ahead of you now to learn and practice my methodology of:

How I Identify Winning Stocks and Out Perform the market by managing the Stock for Entry, Exit and utilizing appropriate Trailing Stops


Contact us at:

investorspotlight@gmail.com

Don't procrastinate.  Schedule a FREE 30 minutes of   "Discovery Call"   with us.  Learn how best we can coach you and mentor you to help you out perform the market.   Very few spots left and they will disappear soon.

Happy Trading!

Amin

Monday, June 12, 2017

My power went out on me last night at 11 pm and I didnt get to finish my usual blog post that I post by midnight Sunday.  I like to pave the road for my readers before market open on Monday. Here is synopsis of my thoughts:

1.  "Buy n Hold"  is a flawed strategy  Dont listen to the so called GURUS u encounter in media.  They have billions of $ at their disposal since they handle hedge funds (other peoples money)
2.   Retail Traders have limited resources and as such you have to constantly harvest profits and recycle them into another leading stock.
3.   We constantly have  "Sector Rotation"  going on. This is what big institutions do with their portfolio.  Today as I write, we r seeing a breakdown in the Technology Stocks.  There were 38 winning stocks that I have blogged about and brought to highlight on my speaking tour.  I had suggested trailing stops on them last Monday and agin adjustments made further up on Wednesday.  This morning mkt is getting hammered on Technology stocks. 34 out of 38 stocks got stopped out on Friday and today.  That is how u limit your losses and conserve the profits.

Financials peaked in march n they made a round trip within 2 months and gave all that profit back.  They are rising again since last week but one should have harvested profits and gotten back into the leading names last week again.  Piling up 8% to 15% gain in every cycle would allow you to outperform the market consistently.  Buy n Hold just doesn't work on Growth Stocks for me.

Review the performance of $ATHM:
a.  Entry 1/23 exit 2/8  (2.5 weeks) gain 10% profit
b. Entry 5/12 exit 5/17 (3 days)  gain 10% profit
c. Entry 6/5  exit 6/7     (2 days)  gain 10% profit

You limited the  "TIME"   risk in your trade.  The longer you hold a position, greater the risk you  encounter with market risk.  
Just FYI ... I closed out my entire position on $QQQ this morning.  In just 2 days, the index has already dropped -3.68%  This leading index was already up by 21% YTD (year to date)  By 10.20 this morning, the index had already traded 2 times the daily average volume.  This is the kind of loss you want to mitigate as a Retail Trader.  Don't listen to the GURUS who will tell you to buy on the  "DIP"

"Buy n Hold"  is a   Flawed Strategy


Lately I have been talking to a lot of traders who want to sign up for my   "Mentoring Program".  They seek me out because they are failing to make progress with their trading.  I get very similar questions from my followers on Twitter and Linkedin as well on a daily basis.  What I have found is that there is a very important mind set that is missing in their approach to trading.  I blame it on the so called  'GURUS'  that so many traders get caught up with.  You all know who they are because they are on CNBC, FOX, CNN, and Bloomberg tv everyday.  Some of them handle hegde funds and have $Billions on hand to make those trades.  We are Retail traders and investors.  We have limited capital resources to work with.  In order for us to outperform the general market, we have to constantly get into a trade, harvest profits and use that capital to get into another trade.  Buying a stock and holding onto it for the long term - 5, 10 or 20 years - is not a profitable strategy to employ.  Traders understand that when they but a stock, they have their entire capital at risk.  What they fail to grasp it that there is also a time risk.  Longer that you hold onto the stock, greater the risk you are exposed to with your capital. 


Friday June 9th we had a reversal in the market.  Technology Sector (mostly chips, software and internet related stocks)  took a beating.  $QQQ  index that I monitor was down    -2.47%  that day.  This index has been the leading index  +21%  YTD year to date)  This is a phenomenal performance and we as Retail Traders got greedy.  Hardly anyone that I talked to, did anything to have an appropriate   trailing stops   on their positions.  In my post last week, I gave a heads up to my readers to seriously look at having a trailing stop on their position.  Monday morning before market open, I suggested trailing stops on 38 of those winning growth stocks to protect profits in the trade.  They were revised up 2 days later to secure higher profits as the market continued to move up. 

Sunday, June 4, 2017

How  I  Outperform  the  Market  Stress  Free


I am not a  "Day Trader".   Saturday and Sunday is when I do all my stock research and stock chart analyses.   Weekend is when I scrutinize the major indexes and review all my positions.   There is also no market noise to deal with and the last thing I want to do during the week is to sit at the computer and watch my positions.   I can never understand why anyone does that.   Watching your positions tick by tick does not make the stocks move.   It makes you second guess your decisions and you end up stressing yourself.

One of my favourite TV shows that I watch is  "Dancing with the Stars"   Nancy Kerrigan  and  Simeon (both Olympic Gold Winners)  practiced every day and spent  360 hours  to perfect their dance routine to reach the semi finals.   They got eliminated in the final rounds in spite of practicing every day to perfect their routine.   Trading is no different.   Before the market opens on Monday, I have to have everything in place  -  My Trade Plan,  My Stock Watch List  and any adjustments that I may have to make to my positions with  trailing stops.    


+53%  to  + 500%  Annualized  Returns

Every week, I pick only 1 stock or may be 2 at the most to place a trade on.   I am not a hedge fund manager with  $Billion  at my disposal.   Being a Retail trader and an Investor, there is limited amount of capital to work with.   I have to constantly harvest the profits to free up the capital so I can rotate my cash into another leading stock.   It is important to select the best of the best stocks out of the  10,000  stocks that we have in the US markets.   Since I only trade   Growth Stocks,   I narrow down my search to the leading stocks,  in the leading  IBD (Investors Business Daily)  Groups  and only in the  leading sectors.   Following are the results  (expressed as annualized returns)  of the 7 most recent stock positions  (3  are closed out and  4  are still open with trailing stops in place)  in the last 14 weeks:
  1. $IDXX ... 2/23 - 4/27 (5 weeks)  +154%
  2. $ANET ... 3/10 - Still in trade      +98%
  3. $HDB  ... 3/29 - Still in trade       +91%
  4. $PAYC ... 4/12 - Still in trade      +126%
  5. $VEEV ... 4/21 - 5/31 (5 weeks) +180%
  6. $ATHM ... 5/12 - 5/17 (1 week)   +500%
  7. $QQQ  ... 4/26 - Still in trade      +53%

The 3 major indexes  (reflects the performance of the US market)  that I follow, have exhibited the following performance year to date for 2017

  1. $DJI ...  +7.31%
  2. $SPY ...  +9.23%
  3. $QQQ ... +21%  

The performance of the  7 stocks that I have highlighted, far exceeds the performance of the general market as indicated by the performance of the 3 major indexes. 

This is the week when every trader should be looking to harvest the profits  as identified in the trade plans. You also want a trailing stop on your stock to lock in some of the gains that you have made.   Some of the stocks are extended  +10%  to  +20%   beyond the ideal buy points.   We had a   distribution day   on  3/21  and again on  5/17   when some stocks sliced thru the  50 day sma (simple moving average)   It can happen in the bullish market like we have one right now.   You want to protect your profits in the trade.   I shall tweet some of the trailing stops for the some of the stocks that I have brought to my readers attention on  Linkedin,   Twitter   and to my  IBD  Meet up  members in the Tampa Bay area.   Have a look and share it with your trading colleagues.   By all means, please continue to interact with me with your comments and retweets of my content.   I always like hearing from my readers and followers.

Mentoring Service

Don't procrastinate and learn from me:

How to Identify Winning Growth Stocks and Manage the Stock to Outperform the Market


contact us at:

Investorspotlight.com

Schedule a FREE 30 minutes of  "Discovery call"  with us.   Learn how best we can coach and mentor you to help you achieve outsize gains in the market.


Happy Trading!

Amin

 

DISCLAIMER



Do not take a position unless you are prepared to sustain a TOTAL LOSS. Your loss could include the money you invested as well as commissions and transaction charges.


The Information I provide is for education and informational purposes only. The Information provided is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information provided is general in nature and is not specific to you or anyone else.


YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A LICENSED PROFESSIONAL. You understand that you are using this Information AT YOUR OWN RISK.