So Reagan was funding the Banderistas.? That is very interesting.
Wow so a Sea Going military power is getting it’s btt kicked in the Red Sea? Who in the Region would be able to do that?
I don’t know Charlie but that seems a little far fetched.
Andy
OK, back to Livermore. He was certainly one of the great traders of all time and Bill O’Neil studied him carefully and based his approach on much of what Livermore did. For Livermore and O’Neil, the economy and politics were irrelevant, what counted is what the market is doing. Bill says 75% of your gains are directly tied to the direction of the market and the direction of the market is controlled by the institutional investors. When you recognize what they are doing, then you can profit. You can call it a bull market or a “confirmed uptrend” or a pocket full of posies. A rose, is a rose, is a rose. Recognize it and use it. This is why IBD did a ton of back-testing on signals of the market. Follow through days, distribution days, etc. CANSLIM is trying to identify the True Market Leaders (TML). The rules are created based on the action of all great market leaders. Increase your probabilities of finding the next Amazon, Apple, Facebook, NVDA, etc. And then, create the rules that let you hold them, or at least sell with the right signal and then get back in with the right signal. The 100 great stocks in chapter one demonstrate this and reviewing them and Bill’s annotations is a very insightful process. This is not day trading or swing trade, this is position trading.
Mike Webster, who worked with Bill at least 15 years, says Bill read the book many times. Mike says he has read it “a million times” and gave it out this Friday as the homework assignment. I have heard Mike mention several times that “Jesse” noticed this pattern or that pattern and that is why it is in the IBD approach.
If you are going to hang on to a TLM, you have to sit. The average market leader will run for 95 weeks, that means several market cycles and/or stock corrections. Can you sit through that? Do you have the rules that tell you how to sit through that or when to sell? That is what IBD tries to do for us.
You can’t bat 1000 with any system. I was able to get NVDA in March 2016 and still have it with a 14,000% gain. That is the goal, that is a life changer. If my IBD portfolio underperforms the S&P by 1% for the rest of my life, NVDA keeps me way ahead of it. Maybe I can get one more.
Review Chapter 1 and the 100 stocks, very informative.
Pete
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Pete
What individual traders or investors hope to accomplish for themselves varies widely. To use a baseball analogy, some try for singles and doubles. Some swing for the fences. Some, like Taleb, will tolerate months or years of bleeding if they can score one huge hit as he did with deep OTM puts when the market crashed back in '87. Made millions in one afternoon, enough to have *!% you money for the rest of his life. Not my style though I’m still carrying some bond positions up over 100% (In one case, up around 450%.) But it worked for him.
But Taleb also makes the point in his books that big-time winners typically aren’t the result of skill and disciple but sheer dumb luck. For every one of them, there is the hidden history of many, many losers who also bet big and who lost those bets.
The easy way to see this is to answer this question. Who’s richer? The janitor who just won a $100 million dollar lottery or some dentist drilling teeth in the suburbs? The correct answer is obvious, of course. Do a Monte Carlo simulation and run those two lives another 10,000 times. In every one of them, the janitor will be pushing his broom and the dentist will be buying a house and sending his kids to college.
Livermore wasn’t called “Boy Plunger” for nothing, and for those same reasons, he bankrupted three times and ended his life in the washroom of a hotel. That’s both sad and pathetic.
Charlie
Charlie, I tried to setup your TTM Squeeze chart in Barcharts. Can you check my look vs yours for the UBER chart to see if I got it right? Thanks.
Do I read this as a buy today?
Simon Sez it is, right?
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Pete,
If your chart makes sense to you, use it. But that’s not how I’d chart UBER. [1st chart] or would I try to trade it off of such a chart. (Way to many whipsaws, per 2nd chart) .
But Simply Wall Street likes it.
Therefore, what’s really needed is a longer lookback.
Where’s Support? Where is the point where a value investor could safely begin to edge into taking a position? Said another way, "“How sure can one be that UBER won’t fall further?”
If you’ve been following the genuine news, not merely US propaganda, we might be mere days away from a hot war, which will be A Bad Thing for stock prices. “The market” isn’t yet discounting that in their pricing. But I think " the market" has it wrong. The Russians aren’t bluffing, and they really have lost patience with the collective West and their lack of willingness to negotiate a settlement that addresses the security concerns of all parties.
Charlie
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Pete,
For a moment, set aside the macro-economics, like the coming hot war, and just focus on the chart for UBER. Create a stripped down version based on weekly bars and a one-year lookback, thusly.
What’s obvious in the chart? The Measured Move on the uptrend (1 thru 4). But notice there’s a possible bear flag forming (5 to 6) that might just be the pivot for a second MM, but to the downside this time, ending at 7 (not yet seen). Or 1 and 5 might be two points --two successive higher lows)-- on an upward trendline.
In short, the chart can be marked up and analyzed in conflicting ways. Suggestion: resolve the ambiguity with a Buy Stop placed above 6. If prices back off, the order expires unfilled. If prices reverse and resume an uptrend, you’re filled.
Charlie
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