Ep. 299 900%+ Return In 11 Months: How To Identify Themes That Power Up Your Portfolio
Investing With IBD
Deep Dive
Why did Leoš Mikulka's trading performance stand out in the 2024 U.S. Investing Championship?
Leoš Mikulka achieved a gain of over 900% in 11 months, making him a leading participant in the 2024 U.S. Investing Championship. His performance is notable for its exceptional return in a relatively short period.
How did Leoš Mikulka start his trading journey?
Leoš started trading about eight years ago, initially using the IBD newspaper and William O'Neill's 'How to Make Money in Stocks' to learn about base patterns, cup-and-handle formations, and fundamental analysis. He manually tracked charts and data, which he believes was crucial for his development.
Why did Leoš Mikulka transition to a shorter trading timeframe?
Leoš found that a swing trading approach with an average holding time of 15 days for winners and 5-6 days for losers worked better for his risk-reward ratios. He is better at cutting losses early and holding winners for a few months if the trend is strong.
How does Leoš Mikulka manage risk during earnings season?
Leoš scales back his positions before earnings to avoid large drawdowns. For example, he reduced his position to one-third of the original size before a critical earnings report, limiting potential losses to 2% of his portfolio.
Why does Leoš Mikulka use technical themes in addition to fundamental themes?
Leoš uses technical themes to identify patterns and setups that are currently working in the market. By combining technical themes with sector and group themes, he can pinpoint high-probability trading opportunities. For instance, he noticed that in Q1, many stocks were retracing to moving averages and forming new bases.
How does Leoš Mikulka recognize sector rotation in the market?
Leoš tracks the performance of different stock categories using a grid that shows gains and losses for large, mid, and small caps across value, core, and growth. This helps him identify where the market is rotating and adjust his portfolio accordingly. For example, he observed a rotation back into megacaps in early December after small and mid-caps performed well in November.
What is Leoš Mikulka's approach to managing losses and drawdowns?
Leoš keeps his losses small, typically around 2% of his portfolio, and uses stops to limit drawdowns. During a challenging period in the summer, he experienced 16 consecutive losses but only a 15-16% drawdown due to his disciplined approach.
Why does Leoš Mikulka believe that GE Vernova (GEV) has potential for 2025?
GEV has strong fundamentals and technical patterns. It formed an IPO base and has been building a second base after a few natural reactions. The stock has also been supported by its involvement in nuclear energy and AI, which are growing sectors. Leoš believes it has good potential to continue its upward trend in 2025.
How does Leoš Mikulka approach less liquid stocks like NextNav (NN)?
Leoš is cautious with less liquid stocks and requires a higher relative strength (RS) for such names. He looks for powerful technical patterns, like high-tight flags, and adjusts his risk management to be more stringent. For NN, he is watching for a potential breakout but is careful due to its lower liquidity.
Why did Leoš Mikulka exit his position in IonQ (IONQ)?
Leoš exited his position in IonQ after it broke below its 50-day moving average and showed signs of a reversal. He was shaken out multiple times due to the stock's volatile nature, but he believes in the long-term potential of quantum computing and is keeping the stock on his watchlist.
- 900% return in 11 months in the U.S. Investing Championship
- Started trading eight years ago using IBD
- Manual chart analysis as a key learning tool
- Swing trader with an average holding period of 15 days for winners
Shownotes Transcript