Stine prefers to stick to smaller stocks which can multiply many times over in price. Some traders will find a stock they like and wait for it to meet specific technical criteria, ie: ADX above 30 and trading close to 20 EMA. Stine, however, uses more classic technical analysis principles on his stocks.
Keeping it simple, he looks for stocks that are previous runners, volume breakouts, breakouts to the upside of the 30 week moving average, and breakouts of a strong base.
When, or how, to sell your stocks is usually the aspect left out of most trading books, or it is quickly glazed over. Noticing this, Stine wrote an entire chapter on the subject, identifying potential sell signals both for fundamental and technical reasons. While not totally accurate, I have since used this sell signal with success. I have mixed feelings about this book. Stine Publisher: N.
Speziale makes it easy for anyone to beat the market and make money investing in growth stocks! Robin R. Speziale lives in Toronto, Ontario.
To cap things off, the CEO had just filed in Ireland that he purchased several hundred thousand dollars worth of shares in an open market buy. I was staring at a stock that I believed had 80 to upside potential, compared with a downside of only 1. At 27, this was my first real taste of success in the market. But according to my calculations, the stocks rise had only begun. As the market Gods would have it no other way, Elan announced an Antegren setback 2 months later.
I was in total disbelief. I was now 0 for 4 in my efforts to crush the stock market. From the lows of the day of that announcement, the stock rarely had a down day for the next 10 weeks.
My 28th birthday was quickly approaching and I couldnt wait to celebrate my newfound wealth with my friends. On the morning of my 28th birthday on June 26, I fired up my computer to see if there was anything exciting to do on my birthday. As I turned to a financial site, I quickly discovered a major headline for Elan.
The company stated that it had discovered that a lethal brain infection was occurring in a small number of patients enrolled in the Antegren clinical trial. Certainly this news could not be good for the stock or for me. Since the companys fortunes now relied. Insider Buy Superstocks almost exclusively on this single late-stage drug, the stock was completely destroyed that day.
Due to the leverage I employed, I was nearly wiped out on my birthday. I found myself again right back where I started. I couldnt believe that this was happening to me yet againand on my birthday, no less. I was in complete shock; completely shattered and destroyed. I sold my entire stake that morning. I had lost just about every penny that I had made.
I was now 0 for 5 in my quest. The drug is now known as Tysabri. Clearly, due to my medical scare, I had stumbled upon Elan by accident. I recognized that it would be very difficult for me to find big winners in a similar fashion going forward. After 3 crash-and-burn episodes with biotech stocks, I certainly wanted to focus my attention on other less risky sectors.
The burning question keeping me up at night was whether or not there was a reliable method to spot the big winners before their advances? That brief encounter with success ignited a passion inside of me that will burn brightly until the day I die.
As I recovered from the Elan episode, it became my sole mission to discover the secret to finding the markets next big winners. I had finally found my calling in life. From that day forward, I wanted to be the best investor that I possibly could be.
I wanted to be better than anybody else. I read anything about trading and investing that I could get my hands on. I spent my days at the library and my evenings online searching through financial websites for investing wisdom. His method appeared to be quite simple and the book seemed to identify most of the markets biggest winners before their major moves.
A key theme of the book was the magic. Stine of modeling excellence in human behavior. Robbins asserted that in order to achieve ultimate success in any aspect of your life, you must model the absolute best in others.
This necessitated seeking out the most successful people in your field and using them as blueprints for your own eventual success. I decided to take Robbins advice and I set out to find the absolute best traders in the market. Specifically, I wanted to seek out traders who had mastered William ONeils principles.
I scoured the internet in an attempt to find the absolute best traders in the business. After mediocre initial success in this vast search, I somehow eventually stumbled upon trading goldI had finally found my mentors. I will go into further detail about this group of traders in the Mentors section of this book. Looking back, this intense period of self-education changed the course of my life forever.
Based on my newfound knowledge, I developed a specific list of criteria to look for, based upon the qualities of past big gainers. I then combined this checklist with specific powerful chart patterns that I deemed to be investable.
I told myself that I would focus my efforts exclusively on the select stocks that met both the highest technical and fundamental standards. Over the next couple of months, I invested in a few stocks that met many but not all of my strict criteria. There wasnt much to write home about until. The stock was carving out what I called a perfect Staircase pattern an example of this can be seen in Chapter This was the most powerful looking chart pattern that I had ever seen. After digging through hundreds of pages of the companys 10q and 10k SEC filings, it became evident to me that the company would be profitable on an ongoing basis.
But the biggest shocker was that virtually every company executive was buying shares on the open marketat ever increasing prices. It seemed as if a brand new. Insider Buy Superstocks insider buy was filed every few days. I had never seen anything quite like it before. After concluding my research, I bought several batches of the stock over the next two weeks. Given what I believed to be an extremely favorable risk-reward profile, I bought the stock without any fear or hesitation whatsoever.
I had every expectation that this Portland, Oregonbased ATM and copy machine stock would evolve into a blockbuster. Over the next 2 earnings reports, my initial thesis proved to be correct. As the stock marched higher, I continued to add more shares on margin after every pullback. The stock continued to march higher within a defined channel at a roughly 45 degree angle out of its initial base. As one might expect, the stocks parabolic ascent had sent shareholders into a total frenzy.
Although the stock had reached my price target, there was a general feeling that the companys future would only get brighter. The shareholder environment was truly euphoric. Every day was a party. Today, I know an awful lot more about price targets, stock euphoria, and parabolic chart patterns. I know all too well what takes place shortly after a euphoric parabolic run. At the time, however, I knew very little about these things and I just surfed the waves of excitement and emotion with a huge grin on my face.
The timing of the Vegas vacation could not have been scripted any better. Or so I thought. After its vertical thrust, its chart had simply imploded in spectacular fashion, very similar to what happens to old Vegas hotels. As I sat in shock in my hotel room, I was forced to liquidate a majority of my position at unfavorable prices.
After the biggest debacle of my career, the rest of my vacation was a total bust. If you are still counting, I now stood 0 for 6 in my mission to conquer Mr. As my career progressed, each portfolio surge was more dramatic than the previous ones. Unfortunately, each subsequent collapse had become more spectacular in scale. In spite of my most recent loss, I now had firsthand knowledge of what types of stocks.
Stine provided the biggest returns. More importantly, I now had utmost confidence in myself and my investing ability. Similar to past episodes, I took a couple weeks off to reflect and to regroup. However, I knew deep inside that I would bounce back with a vengeance yet again. I spent virtually every waking moment in front of my computer screen for the next 2 years.
Consistently working ninety hour weeks, I uncovered a majority of the biggest gainers in the entire market. This rewarding period was anything but easy as I endured several more serious account drawdowns along the way.
During this period, I had no other sources of income. As one might imagine, it was a truly exciting time. The most difficult part for me was to resist every natural temptation to sell or become complacent when my account reached significant million dollar milestones.
It was not easy in the least to hold on. I now know firsthand what they mean by let your winners run. It is definitely something that does not come naturally.
I had to cultivate a tremendous level of confidence to enable me to do so. I will go into detail about some of my biggest winners from this period in Chapter After listening to his introduction, I handed him my statements from the past few years.
I will never forget his reaction after he thumbed through a few pages. He looked up and yelled Are you kidding me?! He immediately stood up and walked over to his office door and shut it for privacy. He enthusiastically exclaimed I have never seen or heard of anything like this.
Needless to say, he took me on as a client. Money to me has always been about time, freedom, and fulfilling experiences. Insider Buy Superstocks beating the market has always been my primary motivation, I certainly did not complain about the money once I had it. Here I was at the age of 30 with millions of totally liquid assets at my disposal and virtually no overhead. I thought it was about time that I reward myself and others for my intense efforts.
The number of commas in my account balance allowed me to do things I had only dreamed of doing before. I was able to buy the cars I was obsessed with as a kid, train to be a pilot, buy my dream condo, travel the world, host gourmet dinners, contribute to charitable causes, and to give a motivational speech or two. For the following two years I continued to enjoy discovering future winners, but more than anything else I was enjoying my winnings and living life to the absolute fullest.
To this day, its one trip to the mall every year or two and thats all I can stand. Personally, I cant think of a more unpleasant way to spend my time. I continue d wearing my Old Navy clothing purchased in the s and I continue to be totally fine with that. Yes, THAT During the middle of a horribly lengthy and painful break-up with my girlfriend at the time, I watched from the sidelines as world markets declined swiftly into the fall.
Given the extent of the market crash, I stipulated that the few traders who were still solvent would pick up the pennies and make a fortune. After several weeks, the technical and sentiment readings were screaming that the market was more oversold than at any other point in its history. Everything I monitored seemingly indicated that it was safe to return to the market.
Being the calculated risk taker that Ive always been, I put my proven bread and butter Superstock strategy aside as I returned to the market. It was a bold attempt to time the bounce. Given the historical magnitude of the global decline that had already transpired, I went in heavier than ever before. To maximize my leverage, I bought call options and triple-long exchange traded funds ETFs on margin.
I truly believed that it was inevitable that history would ultimately repeat and the market would embark upon a vicious rally to the upside within days of my entry. I was confident that this would prove to be the defining trade of my career; the trade that sent me well on my way to a nine-figure net worth. I put everything on the line. I was. Stine absolutely certain in my conviction. The days that followed were days I will never expose myself to again.
In pursuit of the trade of a generation, I had abandoned every single one of my trading rules. As anybody who has lived through now knows, I was wrongdead wrong! I took a several million dollar hit within a matter of days. Millions that I had worked so hard to accumulate had simply vanished in the blink of an eye. I committed a series of fatal mistakes: over-leverage, utilizing options, catching falling knives, trading the general market, trading without stop-losses the list goes on. Previously, my winning strategy had been uncovering undiscovered Superstocks fueled by insider buying.
Had I let the turmoil of my relationship affect my judgment? Did I simply become too greedy? Who knows? What I do know is that because I violated every one of my rules, I was well-deserving of every ounce of the punishment.
This hiatus would be a much longer version of the ones in the past that proved to be so personally rewarding and re-invigorating. At the time, it was universally believed that the world was falling apart as we entered the first phases of The Great Depression 2. I figured that if ever I was to step away for an extended period, there would certainly never be a better time to do so.
Without much of a plan, I shut down my trading operations and moved all of my possessions into a 10 x 10 storage unit in Atlanta. After winding down my personal obligations, I embarked upon the journey of a lifetime and never looked back.
At the age of 33, I had absolutely nothing holding me back. I was now officially mini-retired. With five shirts, two pairs of pants, two pairs of shoes, two pairs of shorts, seven boxer shorts, an iPod, a laptop, and as many books as I could cram into my small backpack, I left the United States without an agenda.
My travels took me through twenty-three of Chinas thirty-three autonomous regions. I even managed to squeeze in Canada and thirty of the United States on two separate camping trips when I returned. The time away was an essential journey of self-discovery. I threw out my watch, watched absolutely no television, read and summarized dozens of books on human behavior not books on trading, as Ill explain later , studied Buddhism, and ran two half marathons.
I drank cat. Insider Buy Superstocks shit coffee in Laos, slept in jungles and on beaches, met some of the worlds foremost computer hackers, and went through four unreliable laptops. I even found myself selling gourmet chocolate from Kazakhstan at one of the worlds largest trade shows in Chengdu, China. I sampled a happy shake in Thailand, saw dogs slaughtered for meat, climbed several 8,, foot mountains all over the world, and was abandoned in China by a rogue bus driver who kept every last one of my possessions.
I even lived among chickens, roosters, and pigs for long stretches. Having spent much of this time in small villages, I can honestly say that a majority of the people I encountered in the developing world had a level of contentment and happiness that easily surpassed that of most of us in the United States. It was not until four days before my most recent flight to the States that I came to the startling realization that I would be unable to return.
After thumbing through my passport, I noticed that I did not have a single inch of space remaining for an exit visa. Over the next three days, I became intimately familiar with the U. As another demonstration of bureaucracy at its finest, the simple process of having pages added to my passport turned into a multi-day fiasco.
Luckily, everything worked out in the end and I was able to return home. In the last year of my retirement alone: I flew some 78, miles; personally drove 16, miles; spent close to hours on trains, hours on buses, and countless hours on motorbikes. Although I rarely placed trades during my retirement, I followed the market closely. I often sent out email market updates to friends and family or posted in public stock forums.
Despite my psychological and physical distance from the market, I found that I certainly had not lost my touch or my enthusiasm for investing. During this time, I sent out dozens of emails highlighting the occasional special situation stockbut mostly alerts predicting sector or general market inflection points. Not wanting to be enticed to trade during my hiatus, most of the time I tried not to look for Superstocks. I focused primarily on global markets, sectors, and themes.
Although there was no personal financial gain, I truly enjoyed composing and sending out my market commentary. This practice kept me involved in the market and allowed me to stay in touch with my network of trading contacts.
Surprisingly, composing these updates gave me more satisfaction than the act of trading had previously. To receive my commentary, feel free to contact me. In the end, the time away from family, friends, markets, and country was essential for me to gain a new perspective on what is truly important in my life. The time off was truly a once in a lifetime period of reflection and growth. I now try to focus on the most important things in. Stine life: gratitude, friendship, family, happiness, and health.
Realizing just how precious life outside of trading is, I now consciously go out of my way to try to create in every moment, to never cease learning, to live outside of my comfort zone, to be more disciplined, to improve my thinking, and to live and act in every moment. But perhaps most importantly, I now realize that we dont have all the time in the world. Because of this, I now always try to take the road less traveled.
I emerge from my retirement with an entirely new vantage point, ten times more energized and motivated than ever before. Physicist Niels Bohr. The immense account drawdowns and subsequent dramatic comebacks that I have endured in my career have been nothing short of breathtaking. Clawing my way out of the abyss each time, I have broken the odds time and again. They say it is not how many times you get knocked down, but how many times you get back up. If I didnt truly live and breathe trading, I would certainly be doing something entirely different today as a result of these drawdowns.
If I have learned one thing through all of my ordeals, it is that the only sin in life is to punish yourself over past failures. Fortunately, I have learned to view losses as part of the cost of my trading education. Each separate experience has certainly allowed me to hone my craft. I am comforted in knowing that I am not alone in my experiences. In fact, many of the great investors that I have studied have lost their fortunes on several occasions. Famed penny stock trader Timothy Sykes lost most of his fortune by the time his hedge fund collapsed in Energy hedge fund magnate T-Boone Pickens has said I have been broke three or four times.
Investment legend Jesse Livermore lost his entire trading fortune on at least five occasions. Curtis Faith of Turtles fame said, Unfortunately, you cannot make the percent plus returns we did as Turtles without drawdowns at these levels. I think my worst drawdown was something in the order of 70 percent. I dont know many people who can sustain that level of.
Insider Buy Superstocks drawdown. It is very difficult on most peoples psyches. Extreme account drawdowns could almost be considered a prerequisite for massive trading success. Against all odds, the most successful traders just never surrender; their suffering capacity defines their greatness. Like many aspects of life, it is only when we hit absolute rock bottom that we decide with every fiber of our being that we simply must do whatever it takes to succeed on a massive scale.
Likewise, in my personal life, it was only after gaining weight and feeling like complete garbage that I found the motivation within to radically change my lifestyle. Without hitting rock bottom, it can be difficult to cultivate the necessary passion within. It has been said that formal education will make you a living, but self-education will make you a fortune. Extraordinary drawdowns certainly have given some of the worlds best traders a priceless self education.
Like many others before me, it was during my own visits into the portfolio abyss that my trading methodology and resilient psychological makeup evolved. I never would have posted such returns had I not endured such extreme emotional and financial extremes.
I learned that absolutely no loss is insurmountable. Necessary learning experiences? You better believe it. The key is not only to learn from them but perhaps more importantly to find the courage and motivation to strike back.
Having said all that, would I recommend that anybody endure similar episodes? Absolutely not! Not in a million years. Those aiming for the record books take on levels of leverage and risk that inevitably backfire. My wish for you is to maximize your potential profits while limiting risk. Utilizing lessons learned from my failures, I outline a rules-based approach later in the book that will help prevent you from making the same stupid mistakes that I did.
You are much better off going into the market on a shoestring feeling that you cannot afford to lose. I would rather bet on somebody starting out with a few thousand dollars than on somebody who came in with millions.
Jack Schwager. Although I have a few traditional qualifications to be a traderan undergraduate degree in Economics, a Masters degree in Business, the experience of starting a couple businesses, and preparation for the Series 7 stockbroker examI feel very strongly that not only are such credentials not required for trading success, but they actually inhibit it. I was flat out rejected by each and every one of them. Looking back, I consider myself extremely fortunate that I was not hired.
In fact, to this day, I keep those rejection letters as a reminder of just how lucky I am. Had I been forced to adopt the traditional Wall Street rules and groupthink, there would have been no chance for me to achieve the independent perspective I have worked so hard to develop. I know several people who have been classically trained on Wall Street. Frankly, their ability to think independently and spot big trends and make big money leaves much to be desired.
Outside of the need for a few thousand dollars of start-up capital, there are virtually no barriers to entry for somebody wanting to take a swing at investing.
Heck, you dont need a degree, you dont need to be good looking, nor do you need any experience well, you do to be successful. Assuming you have a laptop, some savings, and some time, you can literally set up your office in any coffee shop the world over.
As a trader, you have total freedom, no boss looking over your shoulder, no deadlines, unlimited time off and a potentially limitless supply. Insider Buy Superstocks of wealth provided by the tailwinds of unlimited global quantitative easing.
Despite its appeal, very few traders achieve resounding success in this business. The boundless freedom the trader is faced with requires the utmost in self-discipline a neverending quest for me which very few people possess. Furthermore, most traders are controlled by fear and second-guessing which ultimately leads to missed shots when presented with the opportunity of a lifetime.
Discovering a huge winner means absolutely nothing if you dont have the courage to buy and the confidence and conviction to hold for the duration.
While it is often confused with gambling, the key difference is that speculation is generally tantamount to taking a calculated risk and is not dependent on pure chance, whereas gambling depends on totally random outcomes or chance. Our goal together is to learn how to find the one or two jet-fueled Superstocks out of those several thousand that have the potential to change your life forever.
We are seeking an undervalued stock that has the ultimate technical setup backed by world-class fundamentals. The idea is to purchase these stocks at such a point when the potential upside outweighs the downside by a substantial margin. As we move forward, we will shed light on the specific criteria and signals to look for when buying and selling. Believe me, it truly only takes a few of these stocks during your investment career to propel your portfolio into another stratosphere.
One big gainer literally makes up for dozens of the inevitable losers. You might be asking yourself: But how difficult is it to find these rare stocks? Well, aside from the time required, it really isnt all that difficult for the average person to identify these hidden gems well before the rest of Wall Street. I have to be honest thoughidentification is just the tip of the iceberg. The optimal buy point and sell point, and the psychological preparation that go into a major trade are much more difficult to master.
If it was easy, everybody would be making money in these stocks, right? You might agree that the stock market is more or less a glorified casino for financial heavyweights. The difference between a casino and the stock market is that it is much easier to win big over time in the stock market.
Unlike a casino, by being highly selective when picking. Stine stocks, you can stack the odds heavily in your favor thus vastly increasing your likelihood of success. Although the process of discovering these stocks can be quite exciting, you will learn that successful trading can be downright boring as you might not execute a trade for extended periods of time.
Jesse Stine has never held a job on Wall Street. He is not on the financial speaking circuit. Against the advice of his marketing consultant, he does not have a blog or a promotional Facebook page. As detailed in his book, Jesse does just about everything differently. He likes to say, "What everyone knows isn't worth knowing and what everyone does isn't worth doing.
Jesse is an unconventional stock trading cowboy. Jesse is the founder of World His religious principles are independence of thought, visualization, and confidence Over the years, Jesse has spent considerable time in developing nations. Jesse's remarkable personal journey and year courtship with the financial markets are detailed in his book "Insider Buy Superstocks".
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