Buy  High  and  Sell  Higher

Its counter intuitive when anyone suggests that one ought to adapt the thinking of:

Buy High and Sell Higher

We are always looking for a deal when buying a house or a car or clothes and furniture.  Everyone loves a good sale and a bargain.  We have been accustomed to thinking that one should  "Buy Low and Sell High".  Growth Stock investing and trading however requires for one to think a bit differently.  It took me a while to fully understand this concept when I was first introduced to IBD(Investors Business Daily) very early in my stock trading career.  Now it seems clear as a day to me after trading all these years and analyzing 150 to 250 stock charts every week for years. 

In my blog post last week, I had suggested that one ought to concentrate the portfolio to just a few stocks and not to diversify.  There were originally 18 leading stocks identified during the  "Follow Thru"  day of January 7th (blog post of January 13th).  By Feb 1st, lagging stocks were removed and position concentrated into the 6 leading stocks (blog post of February 3rd).  They were outperforming the leading growth stock index  $QQQ  by 2.42 times within 4 weeks of a very successful  "Follow Thru"   day.  Here are the results of those 6 stocks for the last 5 weeks.  I have indicated in parenthesis next to the stock symbol, the price of the stock on Feb 9th 2018.  I have also indicated the higher price of the stock in parenthesis next to it when the stock was bought at a higher price on Jan 7th.  Current price of the stock is in parenthesis next to the  %  return of the stock in the last 5 weeks.  

1. $BEAT (31.65) (58.05)    ...  +27.44%  (73.98)
2. $CYBR (44.05) (69.82)   ...  +27.43%  (88.97)
3. $ALRM (36.18) (51.42)   ...  +26.08%  (64.83)  
4. $VEEV (55.45) (91.59)    ...  +25.79%  (115.21) 
5. $TTD   (42.80) (119.92)   ...  +21.90%  (146.18)
6. $MEDP (36.07) (53.12)    ... +20.61%  (64.07)
7. $QQQ (156.10) (156.54) ...  + 7.68%   (168.56) Leading Growth Stock Index

Average performance for 6 stocks  +24.88% (5 weeks)

Performance of Leading Growth Stock Index  $QQQ  +7.68% (5 weeks)

Buying High and Selling Higher and concentrating the portfolio to 6 leading stocks resulted in outperforming the leading Growth Stock Index  $QQQ  by  3.24  times in the last 5 weeks.

Happy Trading!

Amin