Question:
I joined a new IBD group that met for the first time last month in the
Chicago area. The group is interested in learning how to successfully
invest using CANSLIM. Just to keep things simple do you provide clear buy
and sell signals for the stocks that you recommend.
I’m a little skeptical that anyone’s recieved a 100% return in the current
market. Do you provide proof that your portifolio made 100% this year?
My Response:
Thanks for your inquiry. To simply answer your first question.. yes, I do
provide clear buy and sell signals to my members in a few different forms.
One way I do this is through a Weekly Stock Watch which is sent to members
every Sunday evening and takes a look at the best opportunities for the week
ahead. Each stock is accompanied by analysis of the chart and buy and sell
strategies. As you know, I also run a model portfolio so that members can
see a "real world" portfolio in action. For each stock I provide
trading notes throughout the holding period at critical points (such as
break above resistance or below support, etc.) When a position is purchased
or sold, the member is notified within a couple minutes time (usually as
fast as I can get an explanation written and sent out). Of course, I
recommend that members do their own research before blindly purchasing these
picks.
You asked about performance. That 100% performance is an annualized return
(actually, I need to update that.. it’s currently 95%). That includes a
string of big winners that were recommended when I was working as an analyst
for CANSLIM.net near the end of 2003 (these picks included RIMM, AUO, COH).
As you know, it has been a difficult market in the past year for growth
investors. Year to date, the SelfInvestors.com Portfolio is up 8.3%,
compared to a 6.6% year to date return when you average the major indices.
I’d like to discuss a bit too my investing strategy which is aligned with
the ultimate goal of many of the most successful investing strategies.
It’s as simple as keeping losses small while letting your winners run.
It’s not about how many winning trades you have, it’s the size of your
gains vs. losses. For example, over the last couple months my winning
percentage has been less than 50%. Buy by keeping losses small
(losing trades have averaged 5% loss) they can be easily recovered from.
In fact, one pick (Jupiter Media – up 43% has more than covered these
losses). That is the key to this strategy… you are basically searching for
the big winner and the good news is that you don’t need to be right very
often if you practice sound money management.
I have talked quite a bit about the portfolio, but the real gem of the
service is the Breakout Tracker, which I think you’ll find incredibly
useful. No other site offers a service like this. Imagine having a list of
every potential breakout ranked according to fundamental and technical
analyis which can be sorted by industry group, relative strength, % change
from average volume (similar to IBD’s Where Is the Big Money Flowing), etc.
A quick and highly effective strategy that I encourage members to use is
focusing on industry groups that are leading the market and create a watchlist
of the highest rated stocks in those groups that are near a breakout. Set alerts
for your pivot points and be prepared to make the purchase! The Breakout
Tracker allows you to do this in just a few minutes each evening.
I would encourage you to sign up for the free report which begins the
process of implementing a successful high growth strategy. It discusses the
health of the market and pinpoints sector and industry group strength. As I
do with all members I would be happy to discuss investing and/or my services
in greater detail if you’d like. I’ll remind you that I aslo offer a free
premium trial, which I will be increasing to 30 days very soon (it’s
currently 10 days, which I don’t think gives the potential member a good
idea of what the service offers). Anyway, I hope I’ve answered your
questions here and sincerely look forward to working with you in the future.