Ninety percent (90%) of Americans believe that they are above average drivers. Multiple studies have corroborated this impossibility over the years. I’m certain that the equivalent surveys of American investors would yield a similar fanciful number. It reminds me of Garrison Keillor’s radio show featuring Lake Wobegon — the... READ MORE
So, how did you stack up the equities of the Dow 30 based on Money Flow in Action Practice #17? The first question you should have asked yourself is “what is my personal investing timeframe?” Clearly, a day trader would not analyze money flow the same as a position trader... READ MORE
Have any of you ever found yourselves so overly focused on your individual positions that you are missing the market’s essential big picture? For profitable investing, maintaining a birds-eye view is imperative. This is what asset allocation is all about, and from the academics, we know that this provides... READ MORE
This is all about your fiscal fitness and future financial fate. Pay attention! I’ve written before about the indisputable number of academic studies proving asset allocation is the highest leverage activity that individual investors can focus on. Although this blog will touch upon this, it will be focused instead... READ MORE
Albert Einstein famously said, “If I had one hour to save the world, I would spend 55 minutes defining the problem and five minutes implementing the solution.” If you were in a life threatening situation and had only one hour before it proved fatal, what would you do? Einstein said... READ MORE
At a May 20th presentation to the Seattle chapter of the AAII, Paul Merriman confirmed to me his standing as a respected elder of investment management. Since selling his multi-billion dollar advisory firm in 2012, he has been running a financial education foundation. His motto “knowledge is power” is an... READ MORE
I had a shock recently. I met a couple who was in the midst of what I considered to be a personal financial coronary, yet they were totally oblivious to the perils facing them. Both husband and wife were professionals with advanced graduate degrees. Despite their intelligence and educations, neither... READ MORE
So you’ve heard about Exchange Traded Funds (ETFs). You’ve heard that they are cheap. You’ve heard that mutual fund managers cannot outperform ETFs. You’ve decided that a chunk of your nest egg should be in Healthcare. A friend suggested XPH because it holds stocks like Eli... READ MORE
There is a seismic generational displacement happening in the investment landscape. Many investors are shifting their assets into indexes and ETFs as they move away from stocks and mutual funds. Due to this shift, a number of investment firms are having to make enormous changes themselves in order to remain... READ MORE
I’d like to paraphrase a fishing analogy. Show someone how to invest by following a winning trading methodology and he/she will be happy for awhile. Teach someone how to think effectively about trading and he/she will be profitable for a lifetime. All too often as investors, our... READ MORE
Approximately every five years, I dig into my Trading Journal with the specific mandate to unearth and review where I’ve earned my profits and losses. This is not a small project. I do it on an ongoing basis with all individual trades, but when taken in the 5-year aggregate,... READ MORE
When you revisit the Action Practice #14 blog, you’ll recall that I presented four equities chosen from Investor Business Daily’s 20 top-rated Big Cap stocks. (April 5, 2017 edition.) I asked you to choose the best equity from the following four: Western Digital (WDC), KLA-Tencor (KLAC), Priceline (PCLN)... READ MORE
Anywhere you see excellence and mastery happening, you’ll discover the same set of recurring universal truths. Great athletes achieve excellence and make it look effortless. Great investors make market mastery seem natural and make profits look easy. I love the line “I worked all my life to become an... READ MORE
Financial investment losses are the markets’ way of telling you to make adjustments and to correct your present course of action. The parallels between how American investors deal with financial pain and how individuals deal with physical pain is illuminating. According to a recent article in Consumer Reports, 80% of... READ MORE
My intent with this Action Practice is not to wax on about the importance of understanding what the markets’ current preferences are. My point is simply that if the markets are favoring growth over value, then as investors, our probabilities are enhanced when we invest with the growth winds at... READ MORE
I stumbled into a gift shop full of tchotchkes today. It was one of those retailers with endless trinkets and specialty items that encourage you to revisit your youth and marvel at someone else’s creativity. I became fascinated by one of those intricately detailed Russian “Matryoshka” – the wooden nesting... READ MORE
For those readers who embrace my CORE and EXPLORE approach (this is actually my version of John Bogle’s approach) with respect to Asset Allocation, you can see why I suggest considering country funds for a small percentage of your EXPLORE portfolio. Country funds fulfill the cardinal rule of diversification... READ MORE
Here is how to tell if it’s a regular market pullback versus a serious bearish correction. I strongly disagree with those that claim market timing is toxic. Review this sample of eight of my charts. These types of tools have helped me side-step all the major corrections over the... READ MORE
“An investor’s methodology is inseparable from his or her emotional discipline. Both must be defended and reinforced whenever either is threatened.” — Gatis Roze My trading is guided by a collection of beliefs and principles that direct my trading routines, actions and ‘Investor Self’ behavior. Over the years, it’s... READ MORE
“I have heard many men talk intelligently, even brilliantly, about something – only to see them proven powerless when it comes to acting on what they believe. Investors must act in time.” -- Bernard Baruch There is a fine line between embracing your methodology, trading it, trusting it, understanding all its... READ MORE
In previous blogs, I’ve sermonized that Asset Allocation is the highest leveraged activity that investors can undertake. We produced an entire two-disc DVD on how to execute what we call our “Methodology Allocation” process which maximizes the benefits of a CORE & EXPLORE approach and then optimizes it by... READ MORE
After seventeen years writing an investment column for USA Today, Matt Krantz is joining a money management firm and leaving us with the top lesson he’s learned in all those years. Coincidentally and nearly simultaneously, I ran into two former students at a local Starbucks who had attended my... READ MORE
In Action Practice #10, we applied the Tensile Trading methodology to the buy side of the six charts. This week, we apply the same price relative approach to the sell side and show that it works just as effectively there. We even recycle the CDE buy chart and now annotate... READ MORE
Yes, the fountain of youth really does exist, and academic research is increasingly proving it to be found amidst your investment portfolio. A growing body of scholarly research shows that, in many ways, life can get better as we get older, and being an active investor can contribute in significant... READ MORE
Profits and Consistency — these should both go hand-in-hand and be goals for every successful investor. Profits are the result of a methodology that you can apply with clarity and understanding. Consistency is the result of being able to replicate your winning methodology in a recurring manner. Action Practice #9 challenged... READ MORE
Holistic is most commonly heard in reference to skilled medical practitioners who treat the whole person, considering not only the physical symptoms of patients but mental, emotional and social factors as well. Holistic is also the perfect adjective to describe skilled investors. They appreciate the fact that the numerous parts... READ MORE
Groucho Marx first said it and Woody Allen repeated the famous line “I’d never join a club that would allow a person like me to become a member.” As an independent trader, I’m part of an informal loose-knit group of investors who do what I do, tend to... READ MORE
The Seasonality Action Practice blog from December 16, 2016 is about the two most impactful decisions you can make as an investor. Academics have produced stacks of papers confirming that your asset allocation decisions have immense consequences that flow directly to your bottom line. I maintain it’s the second... READ MORE
Babylonians did it. Ancient Romans did it. Medieval knights pledged the “peacock vow” each New Year as their promise of chivalry. Reflecting upon the previous year’s efforts and seeking ways for self-improvement in the coming year has been a common ritual for millenniums because our human nature drives us... READ MORE
At this time of year, it’s one distraction wave after another. Admit it. Your investing efforts take a back seat to shopping, socializing, decorating, drinking and feasting. Just pick your poison. In addition, many of you head off to warmer climates, as you should. As an investor or trader,... READ MORE
You can’t download stock market wisdom. You have to experience it firsthand and practice it. In a nutshell, that is precisely what these Action Practice blogs every two weeks are all about. The previous Action Practice (#7) presents a tool for uncovering individual investors’ tolerances for risks and rewards.... READ MORE
Far too many investors get it wrong, and perhaps no other group more so than the Millennials. In a recent cover page article on the investing habits of the Millennial generation, IBD reported that Index ETFs are the investment vehicles of choice for these 19 -35 year olds. I maintain... READ MORE
I’ve analyzed over one million charts. That’s not bravado, just math. A hundred to two hundred charts a day (most days) for over 25 years, and that’s the number you reach. I share this because chart reading practice has indeed allowed me to train my eye in... READ MORE
As we celebrate this season of Thanksgiving, I want to acknowledge a few favorite quotes that are embedded with special wisdom for investors. 1. “Everything is worth what its purchaser will pay for it.” — Publilius Syrus (1st century BC) 2. “Don’t try to buy at the bottom and sell... READ MORE
As an individual investor, what you bring to the table in the way of intellectual, emotional and behavioral skills will determine whether you succeed or fail. This is hardly a breakthrough revelation, but it needs to be said nonetheless. It’s been my experience that great investors are not born.... READ MORE
Yes, I’ve profited handsomely for years by trading on the coattails of top mutual funds when they report their new holdings each quarter. Yes, this is precisely why so many of you download the Tensile Trading ChartPack each quarter because we make it super easy for you to coattail... READ MORE
I heard an insightful interview with a judge talking about the transformation she goes through in her chambers as she puts on her black judicial robes and enters the courtroom. It reminded me of my own physician who I know socially and who I’ve seen experience a similar conversion... READ MORE
This is the fifth biweekly Action Practice blog we’ve done together, so I’ll assume most readers are up to speed by now and I don’t need to repeat specifics about “Permission To Buy”. Here is the link to the Action Practice #4 blog which we will address... READ MORE
This ChartPack update is chock full of enhancements as a direct result of spending a week in Napa Valley with all the sensational commentators and luminaries at ChartCon 2016. We confess that we have unabashedly incorporated a lot of their wisdom into improving our ChartPack. We are sure you’ll... READ MORE
I’ve annotated the six charts I presented to you in my September 20, 2016 blog which was an exercise in Selling. If you missed that blog, I suggest you review the un-annotated charts first, and then mark them up yourself before you peek at my annotations. Here’s the... READ MORE