If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring. -George Soros
Trading Apple (AAPL)
Continuation from yesterday…...To summarize, Apple’s stock price appreciated 3,700% (37 bagger) between its 2003 entry point and today. In fact, as our earlier analysis showed, we would have taken a position in Apple, Inc stock in May of 2003 at $2.50 a share. Yet, it would not be an easy ride up. Over the last 11 years the stock had suffered a 60% drop in 2005, another 60% drop during the financial crisis of 2007-2009 and a 45% drop in 2012-2013. Leaving us, once again, with two primary questions.
- Would most investors be able to hold on to their Apple stock while going through such massive sell offs?
- Should investors trade out of their positions and even go short when such declines occur?
As discussed earlier, most investors would not be able to sustain such massive drops without first getting out. Most likely at exactly the wrong time. That is why a proper application of set trading rules becomes so important. So much so, that in many cases it can easily double or triple the overall return on the underlying stock. Easily turning Apple’s 37 bagger into a 60 bagger over the same time length. Let’s now take a closer look at Apple’s trading history to ascertain if we would have been able to trade in and out of the stock at the right times.
Our first significant decline in Apple’s stock price originated in February of 2005 at around $12.71 a share. The stock price then proceeded to collapse to $6 a share within a week, only to bottom at $5 a share a few weeks later. Delivering a rapid 60% loss to Apple’s shareholders. Unfortunately and as mentioned earlier, fundamental analysis would not have helped us anticipate this collapse. We have rely entirely on our technical and mathematical/timing analysis in order to foresee such moves.
Between our May of 2003 entry point and February of 2005 top, Apple’s stock price had already ran up from $2.50 a share to $12.71, a 400% increase in little over a year and a half. Even though the company’s iPod sales were surging as well, any investor should have been wary of his or her stock appreciating that much and over such a short period of time. Particularly, after Apple’s stock price went parabolic in mid 2004. It was a clear warning sign.
To Be Continued Tomorrow……..
Buy The Dip…..The Market Is Never Going To Correct…..Right?
8/16/2016 – A strong up day with the Dow Jones up 175 points (+1.06%) and the Nasdaq up 43 points (+0.97%).
As expected, according to the mainstream financial media the market bottom is in (after a miserly 5% correction) and the time to buy the dip is NOW. Why you should stop worrying and buy the dip
As the Chinese proverb says “We will see.” Since April of this year I continually suggested that the stock market was accumulating energy since about December 31st, 2013. Thus far, the market has accumulated enough energy for a fairly powerful move. Also, certain indicators show that this energy is being released into the market as we speak. Leading to higher volatility and volume. The question is…..will this energy force the market to stage a massive rally or an utter collapse.
While its impossible to tell with traditional analysis, my mathematical and timing work provide a clear answer. If you would be interested in learning what happens next as well as when the bear market of 2014-2017 will start (to the day), please CLICK HERE
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 18th, 2014 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
Buy The Dip…..The Market Is Never Going To Correct…..Right? Google
An Important Set of Simple Trading Rules
Continuation from yesterday…….An appropriate trading approach and a number of fixed trading rules is just as important, if not more so, than your overall technical, mathematical and fundamental analysis. In essence, by implementing strict trading rules and procedures you are able to take all of the guess work out of the equation. In other words, strict trading rules make sure you pull the trigger exactly where you should.
The rules below are based on a simple strategy of getting in and out of various stocks at the right price and time.
Avoid Low Priced Stocks: While it is possible to make large amounts of money with such stocks, for the most part, cheap stocks remain at low levels for extended periods of time. At times forever.
Avoid Slow Trading Markets and/or Stocks: These are the financial instruments that are stuck in a trading range. Do not invest in them until and unless the trend is broken, either to the upside or to the downside.
Concentrate On Fast Moving Markets and/or Stocks: This is where most of the money is made over the shortest period of time.
Never Guess: Take the guesswork (gut feeling) out of your decision making process. Develop strict trading rules that are followed 100% of the time. You should never guess if you have got it right. Let the market and/or your trading rules put you in and take you out.
Always Follow The Main Trend: You will always make money if you follow the main trend. Either up or down. Remember, stocks are never too high to buy if the stock market is going up and they are never too low to sell if the trend is pointing down.
Always Use Stop Losses: I cannot overstate this enough. Always use stop losses to protect your capital. Let the market prove if you are right or wrong. In the meantime, your capital base will remain safe.
Buy At New Highs: Believe it or not, but buying at new highs is the most profitable way to make money in the stock market. Most people believe that they must buy at the lowest price or in the valley. That couldn’t be further from the truth. By buying at the new high you are moving with the main trend.
Sell At New Lows: In a similar fashion, selling or selling short at new lows is the best possible way to exist a stock. It confirms that the trend has changed while giving you the ability to exit your trade at a good price. More importantly, it allows you to trade with the trend and not against it.
To Be Continued On Monday….
Why Can’t Everyone Just Show Love For This Bull Market
8/14/2014 – Another up day with the Dow Jones up 62 points (+0.37%) and the Nasdaq up 19 points (+0.43%).
I am beginning to think that Caligula was right. Here you go ladies and gentleman. Apparently this bull market is so hated right now that it will not end until everyone gets on board. I tell you, that sounds like an amazing investment strategy. As the guy says, “An amazing and glorious run up is just around the corner.”
Unfortunately, I do share in the optimism. This conclusion is based on my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and its internal composition, please CLICK HERE
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 8th, 2014 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
Why Can’t Everyone Just Show Love For This Bull Market Google
How To Generate 80,000% ROI In 15 Years
Continuation from yesterday……….This caution would have been well justified. Keurig’s stock price topped out in August of 2011 at a little over $100 a share and then distributed for a few weeks before starting a major leg down. An investor in the stock should have liquidated his long position and gone short at $80 a share. It was at that point that the company’s stock price broke below its previous low, suggesting further downside. The stock price continued to collapse until it hit bottom in July of 2012 at $17.50 a share. Delivering a gut-wrenching 84% loss in the process.
GMCR Trade #7: Exit our long position at $80 a share while going short at the same price/time. Realized profit from the previous entry point…… $70 or 700%. Overall profit $78.25 or 31,200%
By mid 2012 and after its 84% collapse, Keurig’s valuation levels were, once again, more than reasonable. If anything, the stock was selling at a substantial discount considering its future growth potential. In addition, the stock trended down for exactly one year. This represents an important stock market cycle. Finally, given the extent of the collapse, one year time cycle and general undervaluation, an analyst following the stock should have been looking for trend reversal. This reversal was confirmed in November of 2012 when the stock price broke above its previous high at around $33 a share. A trader should have covered his short position and gone long at that point in time.
GMCR Trade #8: Cover our short position at $33 a share and go long at the same time. Realized profit from the previous entry point…….$47 or 59%. Overall profit $125.25 or 50,000%.
After hitting its bottom, Keurig’s stock price realigned with the overall market and staged a massive rally to $125 a share. Which brings us to today (8/14/2014 – $114) and the overall gain of $206.25 or 82,400%. Making this stock an 824 bagger or almost doubling our original gain.
Today, Keurig’s stock price finds itself at the same juncture it was back in 2007 and 2011. While the company is doing very well, its valuation levels are once again out of sync with reality. What’s more, the overall stock market is in its own overvaluation bubble and on the verge of another bear leg. In fact, any investor in Keurig should be following and watching the stock very carefully here. Looking for various signs that the top is in. Further, said investors should consider exiting the stock and going short once again as soon as the previous low of $90 is broken on the downside. Riding this stock down again before reversing course and going long at the next bear market bottom.
Before we analyze Apple’s trading history, let’s take a quick look at some of the trading rules we must comply with.
To Be Continued Tomorrow……..
What You Ought To Know About Today’s Market Environment
8/13/2014 – An up day with the Dow Jones up 91 points (+0.55%) and the Nasdaq up 45 points (1.02%).
The stock market continues to perform as anticipated. I am sure you have heard before that it is the stock market’s job to fool as many people at once at possible. It is true. And given today’s prevailing view on the Street, what is the worst possible thing that can happen? First, this is how most investors see today’s market.
Liquidity is plentiful. Global financial conditions are the best they’ve been in four years, the strategists note. Moreover, global companies have tremendous amounts of ready cash to spend on organic growth, acquisitions, share buybacks and dividend hikes.Corporate profits are solid. Both top-line and bottom-line growth rates are picking up, and more companies are participating in this expansion. Stock valuations are attractive, and Wall Street sentiment is encouraging. The S&P 500 (^GSPC) trades at a forward P/E multiple of just over 15, in line with its historical average. And the firm’s contrarian Sell Side Indicator, which tracks Wall Street strategists’ recommended portfolio allocation, shows that market experts are even more bearish than they were in the worst of the 2008-2009 financial crisis — which is, in fact, a bullish sign.
Right!!! In other words, buy everything in sight. The Dow will be at 40,000 by the end of the year.
Yet, the question remains. Given the prevailing view, what is the worst thing that can happen? A bear market….a crash…..aliens landing on the White House lawn or the Dow surging to 100K? While you can try to figure it out on your own, you can also rely on my mathematical and timing work. With my subscribers being aware of not only what happens next, but WHEN. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and its internal composition, please CLICK HERE
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 13th, 2014 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
What You Ought To Know About Today’s Market Environment Google
Inspiration Of The Day
How To Trade Tenbaggers
Continuation from yesterday…….
That is exactly what happened in August of 2001 when Keurig’s stock broke below its lower low at around $2.50 a share and headed lower. At that point, any investor who was watching the stock should have A. Sold his holding and B. Gone short. The overall probability of a significant stock decline was too great not to do so. After all, technical analysis was confirming the move.
GMCR Trade #1: Sell and go short at $2.50 a share. Realized profit from the previous entry point….. $2.25 a share or 900%.
As the chart above illustrates, Keurig’s stock price proceeded to bottom out in October of 2002 at around $1.00 a share. Around the same time the Dow hit a low point for its 2000-2002 bear leg. An analyst familiar with the overall mathematical composition of the stock market would be aware of the fact and would be, once again, watching the stock price very carefully for any sign of the bottom and the subsequent trend reversal. Ready to cover and go long at a moment’s notice. And indeed, such a confirmation arrived in March of 2003 when the company’s stock price pushed above its previous high at $1.25 a share.
GMCR Trade #2: Cover our short position at $1.25 a share and go long. Realized profit from the previous entry point….. $1.25 or 50%. Overall profit $3.50 or 1,300%
What followed was an uninterrupted bull market in Keurig’s share price between March of 2003 and December of 2007. During this time the company’s share price appreciated from $1.25 to approximately $9 a share. And that’s where it gets interesting. An investor working with the overall mathematical and cyclical composition of the stock market would be aware of the 5-Year bull cycle terminating in the late 2007 and an impending secular bear market mid cycle correction. Similar to those in 1907-1908, 1941-1942 and 1972-1974. In other words, with the fundamental analysis flashing signs of general stock market overvaluation and with the mathematical work suggesting a deep decline, it was highly probable that Keurig’s stock price was about to go through another correction.
To Be Continued Tomorrow……
How To Control Stress And Fear If You Are A Wall Street Trader
Continuation from two weeks ago…..As I was about to start working on this section of the book the following breaking news story hit the wires, “Robin Williams Commits Suicide at 63”. Williams, one of my favorite actors and one of the most successful comics of all time had everything. At least what most people could only dream of. Wealth, a successful career in a highly competitive business, millions of fans, critical acclaim, an Oscar, children, a loving family, health, exciting projects and a bright future. Yet, after making millions of us laugh, it wasn’t enough. He was dying inside. Depression, drugs, alcohol were just too much to handle. And while we will never know what finally forced him to take that final step, his actions were preventable by applying the same concepts discussed in this book.
Just like the rest of us, Robin Williams was too closely associated with his own mind to come to a realization that he could control it. To come to a realization that he could control the negative energies associated with depression, stress, fear, greed, jealousy and a million other negative emotions. To come to a realization that could separate from them and then transform them into something positive. In the very same fashion that we will be transforming STRESS energies in this book. Most importantly, this ability would have given him the strength and the skills necessary to overcome most of his obstacles. Perhaps giving him the attitude necessary to save his own life in the process. Just as I’ve saved my own many years ago.
Outside of being in an active combat zone or perhaps an emergency room physician, stock traders or investors who actively participate in financial markets work in the highest pressure/stress environment on Earth. Day in and day out. Think about it for a second. Money managers who work with large sums of money have the ability to make or lose tens if not hundreds of millions of dollars within just a few hours. Often making millions of dollars one day, only to lose it all, and their shirt, a few days later. In fact, the emotional peaks and valleys for most of the Wall Street traders might be as extreme as a highly speculative tech stock behaving in an erratic fashion.
In other words, the amount of STRESS associated with avoiding losses while trying to outperform the competition on the Wall Street is truly immense. If we can somehow ascertain how to control STRESS energies associated with trading in the stock market, we can then easily apply the same principles to our daily lives. To deal with various STRESS energies on the consistent basis.
Perhaps one of the most successful and best known traders on the Wall Street was Jesse Livermore (1877-1940). He was famous for establishing a number of trading approaches that are still in use today as well as making and losing several fortunes in his lifetime. Most notable, we was able to amass a fortune of $3 million after 1907 crash and a fortune of over $100 million (over $1 Billion in today’s money) after 1929 stock market crash. Only to lose both shortly thereafter.
In essence, Livermore introduced a trading philosophy that emphasized increasing the size of winning positions while quickly cutting losses.
“All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis. The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich quick adventurer. They will die poor.” —Jesse Livermore, How To Trade In Stocks
To Be Continued Tomorrow……..(Why Am I Seeing This On A Financial Website?)
How To Control Stress And Fear If You Are A Wall Street Trader Google