Heed my caution, the circuitry powering the stock exchanges is designed to smell out stock traders like me and destroy them.
Thus, when you see my initiate my second stock trade of the year, your concern is warrented.
SEE ALSO: THE END IS NIGH: RAUL BUYS A STOCK
This go around I bought MNK. This buy came after performing a top-down analysis last night using Exodus. The study can be found by clicking here.
Same risk management applies: 10 day hold or -10% stop loss. Godspeed.
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Several Exodus users are competent and operate the system to extract actionable stocks. They also engage the macro timing algorithm like it is second nature. Other members, mostly noobs, need to be shown the basics.
That is why they sent me. I am the expert. Please do not envision me like a savant—naturally gifted in the fields of software, stocked markets, and statistical analysis. Running Exodus is not rocket science, though it was developed by a Space Alien Magician. It is simple to operate. Let’s go top down and find actionable stocks right now, shall we?
Step 1: Decide The Relevant Time Frame
You need to think about how far into the past you want your data to go. I want to see which sectors are outperforming since the start of earnings season, which was about 2-weeks ago.
BEHOLD: 2-WEEK SECTOR PERFORMANCE (save all applause until the end)
Nothing really stands out, nothing except the haymaker Basic Materials landed square on the scrotum of bearshitters. Goodness, look at that thing. Now comes my bias, and this is the part where I tailor the results for my needs, and why you need to become self sufficient at this simple form of analysis. I do not want or need a Basic Materials stock in my portfolio. So I will instead dig into the second best performer, our good friend Healthcare.
Step 2: Enter the Armory And Choose a Weapon
Armed with the sector intelligence we gathered above, we now head into The Grid. The Grid is the biggest page inside Exodus and is loaded with tools you can use to hone in on winners. The whole Sell in May thing has me cautious. Therefore I am picking the Free Cash Flow model portfolio as my weapon. It is loaded with fundamental filters by the Le Fly himself. Great screen when you want to find companies whose operations were sound over a trailing 12-month period, in hopes their operations will continue to funnel cash into the company, thus fending off any liquidity issues should credit start to tighten.
I refuse to write out all the steps I take to soup up the Free Cash Flow screen to find actionable stocks. If you are serious about using Exodus set up a 15-minute phone call with me by calling 800-863-7110, emailing [email protected], sending me a DM on Twitter @IndexModel, or ping me on SnapChat [VCali]. Exodus members can access the screen by clicking here.
However, for the unwashed, if you’ve stuck around with your hat out, bedraggled and smelling of cheese, waiting for PICKS, I have your picks.
BEHOLD: THE STOCKS GENERATED BY Exodus MARKET INTELLIGENCE
From the list I like GMED the best, then MNK ::takes bow, basks in applause::
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There were several stocks on my radar, and given the enticing nature of the market I sat on my hands and brooded. The market simply looks too great. My book was up a modest 32 basis points. Given my positioning, I can quite honestly say it could be worse.
One character trait I have found common and I simply despise is people who criticize the success of others. This type of sloth is what congests the highways, bogs down higher education, plagues the political arena, and otherwise leads to my reclusive nature. I sit by the fire in my cold study, quietly positioning to flash past my competition like a ghost.
Speculation is the greatest expression of creativity. However, I prefer to pair my ideas with data. And I would like to share a recent gem The PPT served up for me. My creative mind wanted exposure to the travel industry. My chart brain wanted to buy TRIP. The PPT, and its trove of data said forget about TRIP immediately and buy OWW instead. This idea amalgamated on Friday the 13th. Then this happened:
This type of performance spread pays for years of belonging to The PPT. I will never enter the battle field without it. I have 15% cash and it drives me bananas. I have RVLT, TSLA, F, and GOGO dragging my book down. I am at my high of the year performance return. Should I really complain?
Stay hungry.
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Perhaps it’s the way I chastised bondholders earlier today during my hunger rage, but I’ve had debt on mind all evening. With good timing and prudence, debt can be a company’s best tool, allowing them to outpace their competition when times are good. Of course it cuts both ways and poor treasury management can make a bad situation worse fast.
Rates have to rise eventually. You know it, I know it. Havens like municipal debt are experiencing a rout. Pick your California waterfall: CXA, PWZ, CMF…brutal. The unprecedented actions by Detroit’s financial manager effectively cutting bondholders at the knees, it’s shocking.
Brutal action, potential for rates to rise, you get the point.
But we know there’s a Fed bid in the equities market. We know stocks have an upside bias until the whole shit house goes up in flames, and some of us (me) want to have names we can go long in this environment.
Enter The PPT.
Like Fly said earlier, trading without The PPT sucks. He said so much more eloquently. I’m not financial statement illiterate, but I like to spend my time digging into statistics and reviewing my trades and such. So I come to The PPT with a simple query, find me companies with a beautiful debt situation, fat profit margins, and enough cash on hand to operate. My thinking is companies not only will have to fork up higher interest rates on new debt, they’re going to have a harder time obtaining it. Resources that should be focused growing their business through innovation will be siphoned into the debt game.
You dig though 10-K’s and what have you, I set up a screen. Here are the bullet points of my screen:
MTD Return > 0% – I want stocks that took this selloff in stride, trading in a microcosm
Positive Total Cash per Share
Debt/Equity Score > 4 – I could fiddle with the other debt knobs, but I trust The PPT scoring system to do that for me
Hybrid Change (Daily) > 0% – In hybrid I trust, I want stocks that will move sooner than later, always
Profit Margin Score > 4 – Fat margins
ROE > 25 percent – I don’t know, “The Fly” always likes ROE
There are a few other qualifiers, the screen can be seen here by PPT members.
The list produces 11 matches today:
Then I grab the charts and see if I can wrap risk into any of them.
I like AOL vs 34
PSE sports awesome July stats, gapped huge on May earnings, and looks like it was a gift at 32.75
PCLN is coiled up tight with risk down to around 790 and tons of cash on hand
CBOE has a picture perfect trend higher, but feels like a chase (the best always do)
QCOR is a biotech, which I don’t dabble in much, but that chart looks great vs 42
These are just my back envelope notes. I’m open to any refinement of the screen, comments, or questions. Note also, given the hybrid screen I placed, the list may produce new results on a daily basis. However, I feel like the most recent action bared the brunt force of bond panic, making the listed stocks’ hybrid strength of notable importance.
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