One strategy I use during market corrections is Relative Strength. Specifically, I look for stocks showing "strength" and holding up well "relative" to the market. The theory behind this is that if the big institutions do not sell certain stocks during corrections, these stocks have a high probability of moving higher when the correction is [...]
For the past month, I've been writing on this blog how I moved my clients to 90-100% cash at the beginning of the year. The number one email question I've received is: "When do you get back in?" Before I answer the question, there are a few points I would like to make: 1) This [...]
I am writing this blog post to offer words of encouragement and to hopefully help people learn from my past mistakes. Most people don’t like to admit their mistakes because we all want to pound our chest and let the world know how great we’re doing. I have no problem admitting that I used to [...]
Part of my investment philosophy is raising cash and sitting out during unhealthy markets. I've received several emails telling me "it's impossible to time the market" and "you're arrogant to claim you know when it's unhealthy." It's not called arrogance, it's called putting in the work, studying history, and having the confidence to act. If [...]
1) The first week of 2016 was the worst 5-day start in the history of the stock market. The non-stop selling caught many market participants by surprise. While most were expecting some form of a bounce during the second week of January, the selling continued. It was mostly fueled by: slowing fundamentals, poor technicals, lack [...]
I'm beginning to think the weekends are giving people amnesia about the stock market. We started this year with two BRUTAL weeks of selling. After the MLK long weekend, the market gapped up the morning of January 19th and sentiment seemed VERY complacent. It was as if the long weekend made everyone forget all the [...]
Here are excerpts from the memo I sent to clients this evening. It's a summary of the market so far this year and some possibilities going forward: I am very pleased that we survived the first 2 weeks of 2016 with our heavy cash position. The first week of January was the worst 5-day start in the history of the [...]
I received several emails over the weekend from people who are really struggling and panicking about this market. This is not the end of the world. This a correction, plain and simple! The biggest challenge most people are having with their investments is: Should I just leave everything alone? Or should I cash some out? [...]
The stock market is a master manipulator. It conditions us to think a certain way over and over and over until we are convinced of a pattern. Then, just when we think we have things figured out, the market magically changes character. Keep in mind that a pattern can continue for a long time before [...]
“In 1923, seven men who had made it to the top of the financial success pyramid met together at the Edgewater Hotel in Chicago. Collectively, they controlled more wealth than the entire United States Treasury, and for years the media had held them up as examples of success. Who were they? Charles M. Schwab, president [...]