Whoa! You are confused. I’ll explain. Confident Trader™ is a unique and decidedly unconventional investment service. Conventional investment services operate in this manner. Every couple of months or so the newsletter editor will present a stock pick to his subscribers and recommend that they buy it at any point below a specified price. (This, in itself is a bit silly but that’s a discussion for another day.) Later on when (using whatever criteria he uses, and he’ll probably never tell you what they are.) he determines that it is now time to dump the stock and he’ll issue a “sell” order.
It's Different Here
At Confident Trader™ we do things very differently, for your benefit. We feature, on average, three stocks each month. These are stocks that we have researched, analyzed, and selected because we believe that they are outstanding prospects, but they are only prospects. All of them will need to accomplish more before they become “buy” candidates.
The companies management is going to have to, at the least, continue to perform as well as they have been. In addition the market is going to have to demonstrate that it has taken notice and is responding positively. Sometimes this will happen in as little as a week or two. Sometimes it will take six months or more, and in some few cases it will never happen at all. We provide you with a diverse, pre- screened selection from which to choose because we understand that while “one size fits all” works with socks it doesn’t with stocks.
Let’s presume that all of the stocks we feature accomplish what is necessary and the market responds by moving the price up to the very specific point at which a “buy signal” is generated. And also of course that this price movement is accompanied buy auspicious volume action. If you were to take a position in every stock that we feature, over three years you would find yourself trying to manage a portfolio of about ninety stocks. This of course would be ridiculous, because even if you were capable of playing the role of mutual fund manager you wouldn’t want to.
Something For Everyone
As a new subscriber it is likely that you will patiently observe for the first few months while you practice analyzing each months featured stocks. Four months or so down the road you will probably determine that you are ready to start building your own portfolio. There will usually be a handful of stocks that have moved up and are close to becoming “buys.” Having researched each of them, let’s suppose you decide that the mining stock Buku Bullion Ltd. (BBL) is the best choice for you, and, a couple of weeks later it breaks out on strong volume and you buy however many shares you choose to buy. Congratulations, you’re now in the game and “long” BBL.
Meanwhile, another new subscriber considering the same five prospects decides that the healthcare stock is a better play. Maybe because of the fundamentals, it might have better revenue and earnings numbers. Maybe the technical aspects are better and it has a stronger looking chart. Maybe a psycho-fundamental factor like the aging of the Baby Boom generation and the implications for the healthcare industry made the difference. Whatever the reasons, she concluded that for her the healthcare stock was the best choice.
Meanwhile a third person, having been a subscriber for several years with a well balanced portfolio from which profits have recently been taken is looking to re-invest and is examining the same five stocks. This person decides that because both the natural resources and healthcare sectors are already represented in his portfolio the best choice for him is the software stock. Here we have three subscribers looking at the same stocks yet making three different decisions and the decisions are all good ones. The “picks” were made by the subscribers, not us.
You'll Learn Something
This is where it becomes interesting and you start having fun and start learning something. Let’s suppose that your stock (BBL) moves up steadily until a month later it’s up 20%, at which point, because you’re a new subscriber Murphy’s Law decides that this would be an ideal time to introduce itself. The result is that the advance stalls and for the next two months (BBL) just wiggles around and moves sideways on quiet volume. Three months after the breakout you’re up a little over 15% and not much of anything is happening. Meanwhile, because you are tracking not only the stock you picked but the others as well you notice that both the healthcare stock and the software stock are still moving up on strong volume. The healthcare stock is up 35% and the software stock is up 45%. What’s up with that?! Good question. Now you need to go back and re-analyze all three to see if you can find a reason. Is there something you overlooked? Is there something you failed to grant importance to? Was there some after the fact developments that gave impetus to the other two but didn’t affect (BBL)? Is there maybe no explanation other than Murphys’ Law?
Big Moves Take Time
Confounding isn’t it? Well, don’t get too upset. All stocks act differently and while those that start a move with the greatest strength frequently finish that way by no means is this always the case. Remember, you’re only three months into a move that will likely require three to five years to play out. Much can happen in three years. Suppose the software stock after six months encountered difficulty because its’ “killer app” was buggy and then to add insult to injury a rival sued for patent infringement. The stock falls of the cliff and we get out with but a modest gain.
The healthcare stock after fourteen months was up 60% when someone else, liking its’ prospects decided to buy all of it. We tendered our shares in the buyout and there went the triple digit returns we had hoped for (frustrating but it happens). Meanwhile, pokey old (BBL) after three years has ramped up to full production at its’ Argentine gold mine which is now pumping out ingots at a rate that would make Midas jealous. The stock is up over 500%, moving strongly and showing no signs of slowing down. Now it is the other two people who need to re-examine their decision to see if maybe there was something they missed.
Make Decisions,Gain Experience
The point is that only by making your own decisions and then living with the consequences do you gain experience. It is only through experience that you will learn how to anticipate how a stock might act under various circumstances. It is only by utilizing the ability to anticipate that you will develop maybe not an intuition, as that implies a bit too much subjectivity, but rather a learned reflexive acuity based in experience. It is these things working in concert that create an accomplished, capable, confident trader.
With conventional services you’ll never accomplish any of these things because you’ll never be required to do more than follow commands. The truth is one can train a goat to follow two simple commands like “buy” and “sell”. Five years down the road will the goat be a competent investor? Of course not, it will still be just a goat.
"The conventional view serves to protect us from the painful job of thinking."
