I'd like to welcome all the new members to our PRO Trade Alerts. As a primer for the newbies and a reminder for the oldies, these alerts are based on our 5 PRO Portfolios - Stock PRO, Index PRO, Options PRO, Mashups and Moonshots. You get the alerts for the portfolio(s) you're invested in or subscribed to.
I'm the first to say, we're not always right about stock picks or the direction of the market (and sometimes just flat out wrong). But we do have "an edge" and that edge is a deep understanding of technical analysis and market fundamentals. We focus on companies that are on the cutting edge of innovation and technology and who are the leaders of their sector. This gives our portfolios a best-in-class composition and who doesn't want to invest in the best companies in the world? "Time" is our other edge. We don't look for flavor of the day stocks (uh um, Gamestop) rather we're more interested in long-term trends knowing we'll be invested for the next 10, 20, 30 years.
In the end, the value we add is offering portfolios that fit a certain investing style (stocks, index funds, options, IPOs, etc.); regular updates on our holdings and a 100% commitment to give it our best and make the best possible investment choices for our clients and subscribers. The rest is up to forces we can't control.
If we were to list our top 5 investing principles or the things that guide our investment decisions, this would be a good start:
1) Strong companies that lead will offer a better return on investment than weak companies that follow. This is why Stock PRO is made up of stock market leaders. Book inspiration: Good to Great by Jim Collins
2) Don't cut the flowers and water the weeds. This is a basic rule of investing that says let your winners run (and cut losses quickly) made popular by Peter Lynch, who managed the Magellan fund and outperformed everyone else for a couple decades. Book inspiration: One Up On Wall Street by Peter Lynch
3) Companies must have great fundamentals for us to even consider them as investments (strong cash position, growing revenues, return on assets, etc.) Book inspiration: The Little Book That Beats the Market by Joel Greenblatt
4) Always invest with a margin of safety. This was the #1 rule of Benjamin Graham, the original value investor. To us this means using technical analysis to buy great companies at great prices. Book inspiration: The Intelligent Investor by Benjamin Graham and all of the books out there on technical analysis (there's a lot to it).
5) And last but not least, to make money in the market, we have to be invested. We return to Peter Lynch, who said, "the real key to making money in stocks is not to get scared out of them."
While this is not a comprehensive list of what's important to us, it does offer a roadmap of how we look at the stock market and managing investments.
Market Update
The Q's (technology stocks) continues to live inside a strong upward channel. The sector is giving back some of its big gains yesterday but overall another healthy day in the market (the sign of a strong market isn't one that always goes up).
The Dow just jumped out of it's rising wedge and this is very bullish if it can keep the gains. A breakout higher of most any technical pattern is a strong sign that pricing will continue higher. Good action all around.
