Ep. 299 900%+ Return In 11 Months: How To Identify Themes That Power Up Your Portfolio
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Hello and welcome to another episode of Investing with IBD podcast. It's Justin Nielsen here, your host, and it is December 11th, 2024. And yeah, this is actually my Scoutmaster's birthday. I just remembered that. So happy birthday to my old Scoutmaster from Troop 9 out in Riverside, California. We've got a great show for you today. We're introducing to you a new guest to the podcast, Laosh Makoka. Laosh Makoka.

How are you doing, Liosh? Good. Good. It's an honor to be here. I mean, coming from an IBD-style background, you know, with IBD being my first instrument when I started trading about eight years ago, so...

It's an honor to be here on this podcast. Watch it every week. Well, it's an honor for us because for those that don't know, Laosh has been killing it in the U.S. Investing Championship. He's been doing a fabulous job. And that's not his only job. He's actually, you know, he's got a full-time job. This is something that, you know, trading is something he does on the side. Now, lucky for him, or, you know, some would maybe debate that, he's in the Czech Republic now.

So what he does is he just does his job during the day, and then 3 p.m., that's when the market starts for him in the U.S. Now he's joining us right now. It's 11 p.m. at night for him, 2 p.m. Pacific time for me. So we've got some time zone things, but that's the beauty of the Internet, right? We're all a global community here. So appreciate you coming out here.

at so late at night that's no problem i mean i'm used to these hours now so right exactly so this is just stretching it a little bit um well let's let's get right into it because i think the the big thing that you know people want to know when when someone sees the the performance that you have and just year to date what are you at uh for the championship right now

Year to date. I mean, the results have not been published yet, so it's not official, but you can see it in the description here, around 900%. 900%, right. So that's two zeros behind that. That's a huge percentage. And of course, when someone has that kind of performance, people want to know how would you do it. But...

Maybe you can start a little bit because you mentioned that IBD was kind of your first initial introduction into the market. So maybe you could start a little bit with your background and how you fell into trading. Yeah, I started about eight years ago and

What I started with was, as I mentioned, my first resource was the how to make money in stocks and the IBD. So I was getting the IBD newspaper basically. And the only thing I was doing, I was just basically grabbing all these charts from IBD 50, IPO leaders, the sector leaders and all these lists. And I was just putting into my manual, let's say notes or text files and so on and so forth.

And I started with this classical, like trying to identify cup, fit, handle, flat base, and basically nothing extraordinary. Just, you know, looking at, uh, trying to look at fundamentals, earnings, sales, and really what the O'Neill was teaching in his books.

And then later on, like in the years afterwards, also IBD came with that option to export all the names from IBD Digital. So at that time also I didn't want to really, because my resources were scarce, so I didn't really want to invest too much into other tools that I didn't know since I wasn't profitable. So buying like Market Search, that time Market Smith was really not an option for me and

So what I just did, basically, I took all these names, put it into my own Excel spreadsheet, and I would put my own screens on it, just sort it by relative strength or some other parameters. And then I'd be going through it every week on the weekends, week by week, just marking it like eight weeks, six weeks, first base, second base, third base, and so

cup fit handle and all these patterns and then trying to identify later on as you progress, you know, as you advance in your career, you start looking more into those nuances also like, you know, some advanced pivots, pullback buys and all these criteria and, you know, at that time, you know, maybe I was

When I was doing this week by week, at that time I was kind of thinking it might be a waste of time. Just every year, just every week spending just a huge amount of time just manually marking the charts. But when I look at it now, like five years back, it was maybe the most beneficial thing that I could have done. Going just through the charts manually. Yeah.

You know, and it's funny because, you know, there's a lot of stories of these manual processes that kind of really do great at training. David Ryan, you know, before he won three back-to-back U.S. investing championships was talking about how he was –

you know, the, the charts for model books. And, you know, he was just making copies of charts and that's how he kind of learned, Hey, these are the patterns that you got to know. Tom Dorsey, you know, he was talking about how he marked up those point and figure charts and it was all manual. And even Bill O'Neill, as much as he had these screening materials available to him, he a lot of times was using the paper. He was just going through the stock tables and,

And, you know, recognizing, okay, what things were up the most? What was the volume like? And so, yeah, I think sometimes the tedious part pays off in the end. So it sounds like that was the case for you. Exactly. If you just focus on price and volume, that's all you need. You know, you don't have to bother with all these other technical indicators like MACDs, RSIs, and so on and so forth.

And of course it was not the end of the journey. Then I joined also the Minervinis platform and the program which provided again, like a little more like the microscopic view and really build a solid foundation in risk management and how to handle the exposure and so on. And currently, since also I don't have really a trading community around me here in Czech Republic, I'm a member of a champion team trading with Leaf Group.

So, it leaves a rating. So, we share a lot of ideas there. Also, you know, trying to encourage like-minded traders. So...

Maybe also I would recommend, like, if there's anybody like me that, you know, needs to build a community and, you know, come to join us. Well, and I guess that's the good thing, right? We have all these communities available. I mean, we've got a great community here at IBD. You've got the Championship, the Minervini. Again, we're all kind of using a similar system, but there's a lot to learn about how to use that system and how to make it kind of your own. So maybe you could get into some of the details of that.

What was your learning process like and where are you at now? So now that you've gone through that manual process, you know how to recognize the base patterns. There's certainly those elements of position sizing and selling rules, implementing the rules. How did you kind of get to the point that you're at now where it...

Again, got you the performance that you're looking at today. First of all, before we get to that, maybe I should ask, are you more of a swing trader, position trader? What is kind of your timeframe of holding? I'm more of a swing trader and leaning on this shorter timeframe. So currently, if you look at my statistics, my average time for winners is about...

15 days. For losers, it's going to be maybe like six days, five days, something like that. But of course, it's average. Of course, if there is a big winner, I'm able to hold it for three, four months. But cutting it short is the main factor. So again, that does take some of the IBD traditional style and...

and squish it down a little bit in terms of timeframe. So what kind of led you to that? And how are you making your buy and sell decisions with that shorter timeframe? I think it all comes down to, as you go through your trading career, kind of like trying to build in what fits you the most from a mindset perspective, and also that it works well.

in the math and the stats that you're comfortable with. So also traditional started, we know, trying to classic David Ryan, Bill O'Neill, trying to hold the names for one, one and a half year and trying to hold it for longer. But then also I started noticing like also later on the math, like the risk-reward ratios didn't fit very well. You have to adjust and

find, let's say, the space where you're making the most gains. So for me, it proved to be this kind of a midpoint. Of course, not that short as a day trader, but throughout the years, I was kind of shortening my timeframe since I'm very bad at selling at the tops. So I'm very quickly risking at least first

of my positions into those first breakouts and later on, you know, trying to free roll as much as possible. Yeah. And I guess a big benefit sometimes to that swing trading idea, and again, if you're not holding as long, is that you kind of reduce your drawdowns. Have you found that to be the case? Yeah.

Absolutely. And maybe also like maybe one nuance that maybe might help some traders, like what I try to do with these positions that I'm locked in, that I'm convinced that it's going to be big winners. I kind of try to keep, you know, I try to visualize things. Also, I try to put on a paper really like, you know, these buckets that I have. OK, this is a 20 percent. I have to hear like the 5 percent.

buckets which makes 100% total and in this last bucket of tiny positions I try to keep these three rolling maybe three two percent positions which will equate at the end maybe you know quarter of my portfolio because I just want I don't want to lose a touch of your name yeah yeah the point of the risk management it's not something that I really have like almost in front of me like every day it's like kind of

thing of my daily routine that I'm kind of keeping if I get stopped on all the positions, what's going to be the worst case scenario. Right. Totally makes sense. And again, risk management is something that is just a theme that you hear from so many great traders. It's, you know, from Warren Buffett, you know, long term to the shortest term trader. If you don't have the risk management, then you just don't usually stay in the game for very long. Now,

Another concept here that I think is interesting about

how you do what you do is you talk a lot about themes, but not necessarily how most people think of themes. You know, a lot of people think of the fundamental themes, you know, a thematic approach. Okay, I'm really focused on AI right now. That's the hot thing. But for you, it's not just about the fundamentals. It's also about the technical themes. So could you kind of describe what that is for you? Yeah, absolutely. I mean, you have always like theme can be various things, right? Yeah.

Theme can be, as you're saying, it could be group, it can be a sector, it could be a type of a name. It could be mega caps, small caps. It could be new IPOs from this year. And then you have the themes which are technical themes. So always, of course, unless the market's in bearish territory and nothing's working, you always have the kind of a set where you have the most probability which might work at a time.

you can see it easily from your watch list. If you have a watch list of a few hundred names, you see how they're behaving. So you can see what is the most common aquarium pattern that's working right now. It can be, for example, throughout this year, starting in a Q1, there was SBW turning into this stage two uptrend in many names. You found that a lot of pullbacks started working. A lot of names were finding the

the support at moving averages. And if you combine it with the group sector theme, these two together, you know, it can produce like a dramatic result over time. So for example, the, yeah, if you have this chart here, it was around January, February. You could see a lot of the names like retracing back. For example, arm was the one that I was trading and,

And you had a precedence of SMCI and NVIDIA, which was a group theme, which were rocking at the time. And SMCI came... Sorry, ARM. Yes, you can see the SMCI rocking, then the ARM, if you look back at the chart, came.

I traded it first. I traded it from the IPO from before. But then before the earnings, you had this. And then prior to the earnings, on January 5th, when the name retraced, I think it was a 21-day, 20-day moving average. It found a support there.

And it was very like trading near a danger point. So my total risk at that point was maybe 2%. And very quickly, like it found support very quickly. I was maybe, you know, 5, 6% up. And from there, you have a lot of leverage, what do you want to do with the name? You can take a partial profits, you can move your stops. You know, if you're really short term, you can just also just turn it over and buy some other name.

Since there was such a huge move on earnings here, maybe we could talk a little bit about that because for swing trading, sometimes earnings can be such a wild card, right? Especially

I mean, this earning season, we've seen some phenomenal moves, 20%, 30%, 40% has not been out of the cards for a lot of these stocks. But at the same time, you can see some really ugly moves to the downside, 20%. And for a swing trader, that can be really devastating. So

You kind of had a little bit of a cushion going into that earnings report. So how do you handle earnings? Do you scale back or what do you do? So at that position here, because I had, as I said, my first position was from the base prior. So it was already going back into 2023. And I added at this point that we just went through. And going into earnings, I...

this scale, like most of my position. So I was back maybe to one third of my original position. And yeah, it also, as you correctly said, there was some cushion that even if it kept, I mean, the option market was not showing that, of course, we're going to get, get up 50%. If we get down 50%, of course, it could have been a little bit more damaged, but still nothing that it would destroy my account. Right. Um, and, um,

So you scaled back. Maybe it's a good idea to kind of get a sense of your position size. Some people go with a lot of positions and keep it small. Some people go with large. What is your rough position size that you're going with on a lot of these ideas? My optimal is 25% of my portfolio. Here, however, it was lower because going from the 2023...

I was going into a new year, I was almost in cash. So here I was just starting to build up the position. So here maybe my original might have been maybe like 10, 12%.

So if I took it down like two thirds, it was maybe two, you know, 4% of my portfolio or something like that. Right. And then are you kind of scaling in and scaling out of positions? You know, you're, you're taking profits on the way up or are you adding to things as, as they're working? Scaling up and adding up. It's always like, I try to approach it as a new position. There's always a reason there must be proper pivot developed. I won't just like,

blindly add to my business. Yeah, because it's up. Exactly. Right. Okay. There's also maybe a lot of new traders are struggling with just the FOMO, seeing your name going up and trying to chase everything.

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Give the gift of Scratchers from the California Lottery. A little play can make your day. Please play responsibly. Must be 18 years or older to purchase, play, or claim. Well, you know what? That brings up a great question. So let's maybe shift gears. And for this segment, we can kind of get into the current market because...

You kind of started this conversation with kind of a theme of how, okay, in the first quarter, this is what I was seeing. I was seeing some really big moves, and then I saw a pullback. So maybe you can walk us through that. Here's the NASDAQ composite. Are you using the market indexes that much, or are you kind of – we talked about this. Sometimes it's almost like you want to build your own index of the stocks that you're watching to get an idea of what's really happening under there.

Honestly, I don't watch it during the day. Of course, I have a sense of it, but I look at it at the end of the day. I try to avoid queues because, first of all, it's heavily weighted. You have 100 names, so I think from your watch list, you can easily pick up a few winners, which will make your own index, which is looking great.

But looking at a bigger scale, of course, I would look at Nasdaq Composite, but I would also look at the mid-cap index, like MDY. I would look at small caps like IWP, which is more concerned in the growth. I would look, of course, at S&P. So trying to build a bigger picture where we are, which also it will show also that

ongoing rotation that we're going through, right? It's been talked about since I don't know how long now. It feels like years at this point. Yeah.

Yeah. But so how do you kind of recognize that sector rotation? You know, one way is by, you know, I guess you can start at the kind of that large big picture view, small caps versus large caps. But do you ever get down to like the sector spider ETFs? Like here's...

you know, XLY, the consumer discretionary, which I do have a position in this, you know, versus an XLP, which is the consumer staples, you know, which is considered a lot more defensive. Are you kind of going to that level? Or again, is this getting more to the individual stocks? I will get to those. But again, as you're saying, coming from individual stocks, I'll be looking at the individual names, which will lead me to these groups, which will lead me to general index. Mm-hmm.

Yeah, makes sense. Well, you know what, maybe we could also talk a little bit about, you know, as part of this trend idea, one of the other things that you mentioned quite a bit is how you're kind of using different indicators, again, kind of

getting a larger sense of what's happening. And you brought some slides to kind of share with the class. So I'll bring these up. And first of all, in Market Surge, we partnered up with Mark Minervini. He uses Market Surge a lot. And we partnered up with him to come up with a screen. And again, you kind of created a manual process here where you're just tracking people

what this screen is producing. So maybe walk through a little bit of what this tells you by doing this tracking. So first of all, later on, we will also look at some secondary indicators, which I look at usually when we're getting into an area like now, when it seems to be getting a little bit frothy and so on. But from these slides here, it always tells me where we could be in terms of a trend.

If you look at the beginning of a year, you could see that one month, it means like the state, the 200 day was just starting to trend up in many names, which then were washed out, which later on like didn't really like increase again. And you could see that five months, it means a lot of the names also started turning from that one month uptrend to five months. It means the longer sustained stage two uptrend.

And as we're going through, you can see the numbers increasing. What will be on the next slide is what we use at Champion Team Trading. It's a little bit more, let's say, filtered out. So we filter out the lower priced and lower volume names.

So we get a little clearer picture of names we're trafficking in. And from that perspective, you have to keep it relative, right? We don't look at exact numbers, but if you look like recently, we've been going really into frothy levels in terms of extreme spikes from those names.

which could indicate we could be at a turning point. And it doesn't necessarily mean we're there yet, of course, you know, but from the, it's something to keep in mind and take into perspective with like some other integrators and the index behavior at that time. And, and, and which, which trend was this taking? Um,

So this is excluding low-priced stocks, but is this taking the one month or the five month? This is like it's not directly taking the trend template, but it's based on the same principle of the five month. Okay. Yeah, so it's not a direct copy. There is, of course, some nuances of that leaf put in it.

Got you. Okay. And then also, you know, we just had the bulls versus bears, you know, come out again, comes out every Wednesday. And this of course is from investors intelligence. It's, it's kind of getting up to the levels that are typically associated with a little bit too much optimism. So how do you use, you know, how do you use this indicator? Because a lot of times it's, it's not a great timing indicator to tell you, Oh,

It's a top, but it kind of says we might be close. It's coming with a combination of that previous slide and the general behavior of the names. So, for example, currently what I could see is a lot of these names that broke out from the first stage, second, third stage base have progressed through the uptrend and maybe one, two, three natural reactions have not formed any further bases. So there's a

that eventually they'll have to move, they'll have to build that base, right? To, you know, to shake off a little bit excessive bullishness. And if you put it in a perspective with secondary indicators like these ones, you know, it gives you again a little bit more conviction, a little bit more probability that, you know, it may be an intermediate trend,

In a few weeks, a few months, going into 2025, we could be getting into some turning point. Historically, as you mentioned, going over these 60 years, I think we're approaching like five-year high from the bulls ratio, which is really like excessive bullishness in the market. Right. And then...

Walk us through this one. So N-A-A-I-M, what is that? This is advisors, again, the exposure index. Why I brought it here, it's kind of interesting to look at since in a bullish bears ratio, we are getting into excessive levels. But from this one published last week, we still have a little bit more room to go. So

There's something saying we might get that Santa Claus rally we're all waiting for. Yeah. And, I mean, of course, a lot of folks are looking at that as one of those seasonal times where December –

October tends to be a lot of bottoms. November tends to be a good month and into the end of the year, especially on election years. And this is something that we've talked about with Jeffrey Hirsch from the Stock Traders' Almanac. He's the editor over there, and he'll be joining us in February to kind of talk through our agenda.

our, our, our year in review and the year ahead. Um, so yeah, the Santa Claus rally, I think this year, uh, the expectation is it would, you know, we're typically looking at December 24th through the first, uh, you know, couple, couple of days into the new year. Um,

So how much of that seasonality are you using? I mean, if you know, okay, I've got these headwinds of what typically happens, but I've also got on the other side,

The tailwinds, or I guess, I'm sorry, tailwinds for the positive stuff on the seasonal side, but you've got the headwinds for frothy sentiment. So how are you kind of matching and deciding what to do when you've got those contrary indicators? Yeah.

I mean, it's more like being on the lookout what could happen, right? So it doesn't necessarily mean I have to immediately reverse my positions and so on. But having the statistics in mind, I'll be leaning a little bit more. We'll probably decide that something good could happen in the next upcoming days. However...

Let's say, put it in a way that we would be in some neutral bearishness and neutral bullishness. That would put me a little bit more on the side of being bullish going to the year end. With these factors coming in mind, I'm more on the lookout that I might have to be quicker to start scaling off and peeling off my profits and taking maybe some small losses before damage occurs.

Yeah, makes sense. One other thing, we've got a few other sentiment indicators here. This is just to quickly highlight again a little bit those mixed views of how various advisors might be approaching what's going on since in the previous slide we saw some indicators showing extreme greed. You have a

Some are indicators showing there might be some fear in the market. So, you know, we're not at those extreme greed levels yet. Okay. So you're just, again, you're really looking for the extremes. Do you use negative sentiments in terms of telling you whether things are potentially a little bit more bullish? Absolutely, yeah. I use both sides. I think I don't really make a difference at like,

Some trainers might say, you know, the bullish might give you a little bit more conviction than bearish or the vice versa. I don't really see it that way, you know. I'd be approaching it exactly some way, looking at the extreme levels of both sides. Mm-hmm.

And look, we've got to address real quickly. I'm going to go back to the market surge chart. We've got to kind of address that as ugly as we kind of saw a lot of the growth getting hit. I mean, it really wasn't getting hit that much on the indexes. They just really didn't show that much. But

If you looked at our style, IBD's style of investing, here's the innovator IBD50, and that had a 4% loss on Monday and then another 2% loss on Tuesday. So we were definitely seeing a lot of the heat getting hit. AppLovin, which arguably was one of the big leaders starting on September 11th, when things kind of turned, I mean, boom.

that was down pretty quickly, getting support now at the 21-day moving average line. So again, if you kind of had a lot of these things telling you sentiment was a little frothy, what

What action did you take as a lot of these high-flying stocks, a lot of the heat were coming down so sharply? So I was going already like pretty light going into this week. So I was kind of prepared that something like that might happen. Of course, it wasn't as nice and pleasant. So, of course, also I got a little bit hit and, you know, suffered a little bit heat in my portfolio, but nothing too dramatic since I was a little bit protected. So it comes always...

You know, coming prepared what might happen, you know, we're not in a reactive business really. If you're coming into a day, you should have a plan what might be happening and how you're going to react to it, including your worst case scenario. And how do you kind of, you know, do that for yourself, you know?

when you're looking at that worst case scenario, I mean, there's certainly like the technical levels, but of course, you know, some of these stocks gapped down considerably. And so sometimes you don't, sometimes you might misjudge how bad it can get, how quickly. Yeah, of course. I mean, that's why we use stops, right? If you get stopped out on everything, then we're out. But again, it's not just black and white answer, you know, it's a little bit of origin to it, but it comes first from,

If we look at the stops getting hit, then of course you might see that something bad is happening in your portfolios. You might have to, if you're overexposed, you might have to, you know, pull some brakes also on some other names and de-risk your portfolio as a whole, you know.

You don't necessarily have to, when I'm saying the risk, you don't necessarily have to take, you know, immediate, immediately the names out. You can always, again, move your stops, you know, just since also I like I'm working full time very often. Also, I use hard stops. Something like this happens. If a name gaps out, unfortunately, then I'm out a little bit of slippage, but at least, you know, nothing worse happened. Right. Right.

there's something to be said for a lot of times after you've been doing this for a while, sometimes, yeah, taking a loss is almost a relief because it's like, okay, well, it didn't work, but at least I kept it small in a lot of cases. And again, it's going to be a little bit individual, right? How much can you stomach, right? Somebody is, you know, and how much gains have you gained recently, right? If you gained...

If you're trading larger, you're a fund and you've gained 10%, 15% for a year, you probably don't want to get 10% back. If I'm up 9% I can afford to, even though it's not pleasant, I can still afford to lose 10%.

A few more slides that I wanted to get to that you brought to share, and we'll start off with this rotation idea. So you kind of created a grid here of, you know, for those that are maybe listening to this, I'm just going to kind of describe it. On our y-axis, we've got large, mid, and small. And then on our x-axis, we've got value, core, and growth.

And then you've got kind of a nine square grid. So how do you use this and what is this telling you? Not to take all credits, it's actually created by our team member, Derek. So I just took it from him. But these...

These slides, I wanted to highlight the ongoing rotation that we have. So you have the percentage gains or losses per that time period. So here we have one week performance and how, in general, the large value versus growth were behaving. And here on the bottom, we have the mega names, small names, and so on and so forth. So you'll see that.

The first week of December, we have this huge rotation back into the Mach 7 and all the meganames. On the next slide, you will see what was happening in November underneath the surface. On the other hand, meganames lagging, small cap, mid cap, micro caps were firing. So again, this shows you might have to build a bit quicker this year. And I guess...

so walk me through how you use this because for some people the rotations are coming so quick that if you kind of look at oh mega caps had a good week or that's what's in favor because of the relative strength by the time you start buying it it's like oh now we're moving to the small caps so how do you kind of use that in order to gauge not just where the puck is but where you think that puck is going I think from

From me personally, I think it fits pretty okay since my time horizon is fixed perfectly where these rotations have been occurring. So I've been hitting kind of these sweet spots where to get in, where to get out. But of course, maybe if...

let's say if you would have sustained trained in certain of those categories like the mid caps there of course again I would be a little bit more my watch list would probably contain you know I would be looking putting much more preference to these names and I would kind of be putting those mega names into a background and

I mean, my wish is that we get some new, let's say, fancy abbreviation instead of Mac 7 Fang, that we get some new leaders coming up and next year we'll be talking about a new group that nobody's heard of. Right. And then this is such an interesting graph here. So this is something that you kind of created. So.

Let's talk a little bit about the distribution of how your profits and losses happen. So first of all, I think it's important that people realize, especially if you're new to this, it's not linear, right? Your 900%, I'm sure, did not come from just like a steady movement. Did you have certain time periods where it was like you were really killing it and then, okay, now it's trying to keep what you've earned?

uh and not not give too much away yeah so let's start maybe from a negative side i think it was uh in throughout the summer since also the market wasn't very good and it was also a combination and i was starting i started getting kind of my first attention right so people started noticing and i got into this mindset somehow that you know now i cannot disappoint i have to be pressing the gas all the time

But luckily, again, for me, what I was able to do since I started accumulating losses, I started taking smaller and smaller positions. So actually, if you would see this distribution in, I think it was July and August, at one point, I think I had maybe 16 losses in a row. And I still produced maybe like 15%, 16% drawdown, which is...

a little bit excessive but nothing that you wouldn't be able to recover from. And that's because you kept the losses small. Exactly. And what I wanted to highlight here is people think to have such a dramatic return you need like I don't know how many 10 baggers and you need to have all the names going 100% and more. Well, it's really not the case. It's all about moving that alpha, the distribution curve just a little bit to the right. The more you move it to the right, the

you know, the higher returns you'll get. But of course, set there the wall around, you know, what your maximum stop loss is. It might again differ, you know, day traders might have 2%, long-term investors might have, I don't know, 7%, classical O'Neill. But, you know, try to keep it, try to be increasing the distribution on the right and keep the middle steady. And eventually, you know, it's all about small steps.

And, you know, it looks like, again, if we just kind of, you know, visualized a wall right here at that, you know, 8%, 7% level right here, you can see that definitely the majority of your losses are actually, you know, right there in the 2% range. So, again, very small. And, again,

To your point, the more than 40% gainers, not a lot of them, but enough to really kind of... Again, a lot of small gainers here. And these are just more than enough to kind of get you the performance that you've experienced. Yeah. Also, there was a lot of small gainers that came as I started trading, like increasing the positions in the competition, like heavier and heavier. And I would be...

much less willing to lose right so if really like heavier positions start reversing i would be just taking those small gains you know trying to keep moving that curve and of course i can always buy the name back you know if it acts right you know it's nothing stopping me from doing that i'm not a father that i would have to be scaling from a position from weeks i can just turn it with a click of a few seconds yeah

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Okay. For this segment, I want to kind of get into some of the stocks that are on your radar and you can kind of share the lessons that you've shared with us so far and kind of go to an implementation, if you will. So we can start out with GEV. And I actually have a position in this myself. We put this on SwingTrader, our SwingTrader product. But

I mean, this has been one of the strongest stocks out there since this spinoff happened. GE, of course, we have a long history of GE, and this just kind of split off into GE Vernova, GE HC, which is the GE Healthcare, and certainly GE Vernova has been doing very well for a while. So,

Walk us through what you're looking for here. Is this one that you've traded already? Do you own it? This is one that I traded and I tried to get back on last week. I'm still in that position myself. My stop held, so so far so good.

Okay. And what is it that you're – when you're looking at this, are you looking at the daily chart mostly, the weekly chart? I'll be looking at both. I'll be looking at daily and weekly charts.

From GEV, let's maybe come back to that story first. It's a spin-off from GE, but traditionally it's coming from wind turbines and all this wind energy, right? But also part of the subsidiary of the GEV is also GE, the nuclear industry.

which is so GEV is now getting a lot of nuclear space, which have been talked about recently a lot also in relation to AI. Of course, for AI, you need the power and you need to get the power from somewhere. And if you look at also the fundamentals of the GEV, they've been stellar. Quarter after quarter, the EPS, as you can see here, 965, 44%. It's a steady fundamentals coming in.

And from a technical point of view, that's exactly what I was describing earlier. We have here the first IPO base. And since then, you had a few natural reactions like on daily charts. But on a weekly, basically, you can see almost that David Ryan MVP criteria on a weekly chart. You have just multiple weeks up, all the good closes, close.

good increasing volume on weekly, but eventually as you get overextended, you'll need that second base. And that's what's happening right now. We're about a four weeks base for the newer name. You know, maybe you can shorten the timeframe of those bases a little bit. You don't necessarily need for a newer name, like eight, 10 weeks base, but we will see. Of course, I think it still needs now some sideways action.

But I think it has still going in 2025, very good potential to continue. Very good. Well, you mentioned, you know, nuclear and the energy. But this is kind of in a different space. When you say NN, it's so funny because I think I shared with you that I think of the old Nortel networks from the 90s that was a high flyer and you can't even pull up the symbol anymore because it no longer exists. It was sold for parts. But...

This is kind of a lower liquidity stock. So maybe we could talk a little bit about your liquidity requirements. As individual investors, we have a lot more ability to get into some less liquid names, but there's always the risk of volatility. One big player can jump in and really kind of move these stocks. So do you have like a liquidity requirement for yourself? No.

Not necessarily like a certain liquidity set in stone, but of course, if we go into a really micro caps, I'll be trying to avoid them unless I see some really powerful technical patterns like we're seeing here.

We got from that lower priced category into about $17, which at least we're getting into the area where maybe some institution wants to jump in. There could be some chance. So I'll be looking like, if I look the lower I go in the liquidity, the higher RS I would require for a name. I would not be trying to bottom fish lower liquid names.

And, again, here it comes with a combination of the, let's say, the technical theme, which we have here, like high-tight flags setting up. As you can see, we've came from this period of dormancy about, you know, between, you know, $6.50, $8, all the way now to about $15.00.

And you can look now at the whole base, basically, you know, those four or five weeks as one high-tight flag. We try to come up, we stop, and now we're pausing for the third week exactly on that resistance, on that supply level, staying very tight. We've got enough time that the moving averages have caught up, like the 10, 20-day moving averages have caught up. So there's some potential for the...

name to burst further. We'll see, you know, there's always might be some under a shakeout, which could be still useful, but I think there's a potential for risk. Of course, the lower liquidity, it's not going to mean that I would increase my risk just because it's lower liquid names. It's going to be the exact opposite. You know, the less liquid, the more stringent I'll be on the risk. Right. And then I thought we could kind of end with one that

has been another high flyer. And again, this kind of shows how quickly some of these high flyers can come down. So IONQ, of course, they're into quantum computing. Alphabet announced how they're kind of getting into the quantum computing, you know, some partnerships there. And, you know, the weekly chart here just looks, you know,

incredible such a strong move I mean this went from basically you know $7 up to $30 you know $35 and change huge move

This week, you know, this is only Wednesday and it's already down 22 percent from its peak. So I guess, you know, the first question is and you don't own this right now. So it's it's a lot easier to watch that from the sidelines saying, OK, maybe there's a setup happening when you don't own it. But for people that own something like that, how much how much are you willing to give up in order to stay with a position?

Yeah, honestly, like looking at these names, I think it will be very difficult to stay on board for this whole uptrend. You can see even those undercuts of that 10-day moving average. And now, you know, we broke for that support today, of course, and that huge, which spiked down.

And again, it of course comes to personal preference, how much you're willing to risk. But then of course, I'll be also looking on the clues in terms of the price and volume. Like, do you have any reversals? Is there maybe some low volume coming up, higher volume coming down? Are we having good closes, bad closes? And also looking at those technical cues

that could help you identify, you know, if you might have to be starting to cut the position a little bit or if you can just, you know, ride the trend.

but very difficult to stay on board. I think from the technical perspective, I think a lot of people could have thought, okay, it's, you know, when we got into that first area, it was about 16 that moves over that we already ran up from six to 60 and a huge move. But if you zoom out on a weekly chart, then you can see basically that we were just turning to it first. You know, it was basically this huge pace of,

was uh if you even want to consider it as a base then it's we were just getting into you know first leg of that uptrend so now i'll be carefully watching going through a new year i don't think looking at the action today i don't think there will be any actionable pivot anytime soon but fundamentally i mean i'm a big believer in uh in quantum computing

I also looked up some interesting data about quantums, for example. They said some simulation for traffic for 10,000 vehicles that...

10 GPU NVIDIAs would be doing 24 hours. These few of these Cupid quantum computing can solve it in maybe, you know, one and a half hour or something. So it can really be a game changer, I think, in terms like AI, quantum computing and all these pieces of puzzle coming together. Yeah.

So this is on the watch for you. And again, it doesn't bother you that something like this has come up so, so much. You still think with the appropriate amount of pause, it could have another run. It's exactly, it's, I think it's advantageous. You know, there are some interesting hands trying to get on board and name. You just have to give it a little bit time to, you know, we cannot go to infinity. Yeah.

Right, yeah. So, you know what? I'm going to kind of surprise you a little bit because we have a little bit of time in this segment. Are there any particular big winners that you've had this year that you want to kind of share how you handled it? Is there anything that sticks out to you that was like, wow, that's kind of the one that really...

really helped out well the GEV actually we discussed was a big winner but I don't even want to go back to it or then also Kava was one which was very easy it was very easy to hold and are you still holding this one or not anymore not anymore okay

Yeah, I mean, a lot of us were holding this as well. The break of the 50-day moving average line certainly, you know, wasn't that great of a look. But, I mean, we were kind of a little concerned at this earnings move that, you know, reversed so, you know, so much. So how are you handling this one? And I can go to the weekly chart if that helps. So basically, I started, I was trading basically from around that,

Is that about March area? And I traded multiple times. Uh,

So I went into the first leg up, then I got shaken out. Because very often when I start peeling off the position, I'll start putting my stops around the moving averages and some technical patterns, like some natural reactions and things like that. And this nature of the kava was kind of a lot of shakeouts, so many times I've got shaken out, but the action was still good, so many times I just entered right back.

For example, if we go on a daily chart, the interesting point was those earnings in May, June, when around that level, when I held some piece into the earnings and I got shaken out on some part, as it started approaching the moving average, I actually jumped right back because still the

The risk from that new position was maybe about 3%, so still a lot of volume was coming in at the day from the scare. And the remaining position led me to hold it from all those areas before all the way over that 90 level. And I think the last time I got stopped out here was on that 50 day. It was my last day.

part after that 98 when we started breaking out from the first base. And then I entered again exactly there as you have the mouse. So, and I think here, I actually, I got stopped a little before earnings around that 129 when it started coming in all the way into 129 prior to the recent earnings.

Yeah, that scared me off going to earnings. And yeah, unfortunately, it could have been even bigger. But I mean, what's interesting, so many times is you get shaken out with something like this, and you look at it a few weeks later, and it's right back to where you sold it. So yeah, you could have gotten more, but...

Yeah. Top ticking. It's just not, not, not something that we do that often. Right. Okay. It's always about hitting that sweet spot. Right. Yeah. Uh, get, getting the heart out of the watermelon is what Bill O'Neill, the founder of investors business daily used to say. Um, well, it was really nice chatting with you. Uh, really appreciate you coming on the program, uh, especially since it's almost midnight where you're at. Uh, and, uh,

I hope you have a great holiday and good luck to you in terms of the end of the year and kind of sealing your spot in history as a U.S. investing champion. Thank you, Justin. It was my pleasure. Yeah. Okay.

Thank you. Well, that's going to wrap it up for us this week. Please join us next week. We've got Kathy Donnelly coming back on the show. She's one of the authors of The Life Cycle Trade. We've talked to her a lot about how well she's able to buy and hold on stocks. She's got her mental capital preservation rules. So we'll talk to her a little bit about how she handled this recent reaction this week.

and see what stocks she has on her radar because there's a little bit more happening in the IPO market that might be worth watching. So we hope you join us for that. We're going to be live 5 p.m. Eastern on Wednesday, one week from today. So that will be on the 18th. So hope you join us. See you next time. Bye now.