As the readership increases, I wanted to take a minute and explain how, and why, I do what I do. This will help you understand my investment approach and why I send out so many ideas.
I have my own belief system regarding investing. Part of that belief system is a firm understanding of the relationship between strategy, serendipity, and outright luck. My investment philosophy has always been rooted in a mix of analysis and the ability to seize opportunities early in their cycle. By marrying technical analysis, fundamental evaluation, and narrative understanding, I've crafted a blueprint that not only profitably navigates the financial markets, but also allows for the prospect of stumbling upon unexpected greatness. Or, as you might call it… Luck
This “unexpected greatness” is what, for me, leads to massive outsized gains over time.
I am a firm believer in my inability to find greatness from the onset. The investment landscape is too competitive and capitalism is ruthlessly disruptive. There is absolutely no way I could look years into the future with any sense of certainty about the long term prospects of a company.
Therefore, I needed to create a process that allows me to “stumble” upon a monster winner without necessarily trying to find said monster. I needed something that would put me in the right position from the onset, but not rely on me picking the best one from the start. I incorporated a method that allows me to put the “picking” the winners back on the market. And…
I needed to incorporate “luck” into my system.
And I have found, the harder I work, the “luckier” I get.
I will use a fishing analogy to help explain how stumbling around can actually lead to massive gains (if done right)
Lets Go Fishing
If you want to catch the biggest Bass fish on record, you need to find a pond that has the potential to create big Bass fish. This will entail a study of previous ponds that have produced large Bass.
What commonalities do they have? What characteristics do they share? From there, you have a place to start. If you are in the wrong pond, you will never catch the monster Bass.
I have studied the greatest stock market winners in the past 100 years. I have tweezed out their commonalities. Bill O Neil was very good at this, maybe the best. And his book “ How To Make Money In Stocks” is a classic. If you have not yet, please read that book.
I look for stocks that have a game changing story. That are changing the way we live, work and play. Usually they have solid revenue and sales growth patterns and a new product or service. Sometimes they are in a totally new industry, or an industry going through major change.
That is my investable “pond”. That pond is filled with stocks that are game changers. Disrupters. Producing ideas and products that could change the world. That is where the stock market monsters swim.
Next, you need the right equipment.
If you are hunting monster Bass, you better bring the right gear. With the wrong bait, the wrong line, the wrong rod and reel… your chances start to diminish quickly. Without the right bait, the fish wont even bite. Without the right line, you might hook a monster, but never get it on the boat. Without the right rod and reel, you might just be wasting your time fishing for a monster.
My PowerMove system is my bait. This is what “catches the monsters”
Over the last 100 years, almost every major market winner has exhibited a “PowerMove” (will be writing a detailed post on this). It can be several weeks of sustained buying and relative strength, or be kicked off in a single day with a high volume breakout on the back of news. But one major commonality is relative strength with increased buying and strong price action. You see this action, you know something big MIGHT be on the line.
That is how I hook my monsters.
My trend following strategy is my “line”
Once you hook your monster fish, you need to keep it on the line. That entails having line strong enough to reel it in without breaking the line. But not too strong that it doesn’t allow the fish to have flexibility to move. The fish will be going up, down, left and right. You have no control over where the fish goes after it is hooked. You just need to zig and zag and go with the flow.
My trend strategy puts the decision making back on the stock. It dictates when I buy, sell, or add into a position. I re-evaluate my rules on a rolling trade basis. But the decisions are up to the positions. If they setup additional buy points… I add. If they don’t, I trim. If they reverse on me, I sell. No emotions. Its not even my decision. The rules attempt to allow a monster to stay on the line without selling too early. But not too flexible to allow the line to break and give up too much cash. It is an art and a science, and different for everyone.
And here is where I purposefully factor in serendipity and luck.
Let’s say you are in the right pond, at the right time. You are using the right bait, rod and reel. And all of a sudden, you feel a bite on the line. You hook the fish.
But until you get the fish out of the water, until you have reeled it all the way in, you have no idea the actual size.
And like any stock I end up buying, I have no idea how the story might unfold, or how the price may go.
It can turn around and stop me out the same day.
Or it might go on a multi-year run and produce life changing gains.
But I will only know that AFTER the fact. Just like you will only know the true size of the fish AFTER you pull it from the water.
That is why I call it stumbling on greatness. I throw out a good amount of lines in the right pond. I get lots of bites and nibbles. And I don’t know which one will be my monster. And I don’t even try to guess. I just hold the line. And see what happens.
That is why I created rules. I let the stock dictate when I sell, when I buy more, and for how long I hold for.
By constantly putting myself in the right place at the right time with the right equipment, I have landed monsters without even trying. As the old saying goes, “ its better to be lucky then good”… But with a lot of work, you can be both. And that is where the money is.
I let the stocks dictate if I hold, sell, or buy more. It is really that simple.
That is why I issue so many reports and ideas. I am casting out line after line. It is up to you to decided which ones to take, and how to handle them. I will provide research from previous market winners and you can devise your own rules that fit your investment goals.
Either way, I hope this makes sense.
Lets catch some monsters…
—NS
PS - I am not here to make a living. I am here to make a killing.
If you are looking to eek out cash flow, this system is hard. If you are looking to eventually pyramid up into a multi month or year long+ run on a game changing stock, this system makes it easy(ish).
You just need to put in the work.
Everyday.
Day after day.
And eventually,
You will get lucky.