Probability Series #1: The Medical Doctor Who Beat Roulette
Aug 14, 2018 | Investing Strategies
Understanding probability means knowing how to put the odds in your favor. This can help you generate reliable investment returns over time. Probability can also mean the difference between “investing” and “gambling.” Two people can be playing the exact same game. Yet one of them is investing … and the other is gambling … based on the fact one knows…
The Transition from Growth Back to Value is a Big Hidden Story
Aug 10, 2018 | Investing Strategies
As you know, lots of things move in cycles. There are business cycles … seasonal cycles … weather cycles … cycles in nature (the ebb and flow of animal populations) and so on. There is also a long-term cycle in the relationship between value stocks and growth stocks. Sometimes, for years at a time, value stocks outperform growth stocks. In…
Learning to See What’s In Front of Your Nose
Aug 07, 2018 | Investing Strategies
Eric Arthur Blair — better known by his pen name, George Orwell — is the British author who wrote the timeless classics Animal Farm and 1984. Phrases still in use today — like Orwellian, Big Brother, and Thought Police — are a result of those novels. Orwell was also known for his essays. In 1946, the year after World War…
Value Stocks vs Growth Stocks
Aug 03, 2018 | Investing Strategies
David Einhorn, one of the billionaires in TradeStops’ Billionaires Club, reported terrible results at the end of July. His Greenlight Capital fund has lost 18% so far this year, and he blamed his poor results on the underperformance of value stocks compared to growth stocks. His observation was that the Russell 1000 Growth stocks have dramatically outperformed the Russell 1000…
Cognitive Bias Series #4: The High Cost of Thinking with The Wrong Brain
Jul 31, 2018 | Investing Strategies
Did you know that you have two brains? Or that “thinking with the wrong brain” is a problem investors face … which costs them a lot of money? You don’t literally have two brains. It’s not like there’s a spare somewhere. But the human brain has two different “systems,” which Daniel Kahneman calls System 1 and System 2. Kahneman is…
The Return of “Ameribuy”
Jul 27, 2018 | Investing Strategies
More than two years ago, we introduced the term “Ameribuy” to the investing world. It was right after the Brexit vote that shocked the pundits. Our investment thesis at that time was very simple. Money was pouring into the U.S. as investors worldwide were looking for the best possible investment returns. The S&P 500 triggered a new Stock State Indicator…
Cognitive Bias Series #3: What Israeli Air Force Pilots Can Teach Us About Investing
Jul 24, 2018 | Investing Strategies
Even the best investors in the world can benefit from TradeStops. We know this because we’ve extensively tested the results. We track the stock portfolios of multiple billionaires — most of them investment legends — and the data has shown that, generally and over time, our software could have substantially improved their already excellent performance. That leads to an interesting…
Why the Gold Trade Went Wrong (And What We Can Learn From It)
Jul 20, 2018 | Investing Strategies
We started our bullish outlook on gold in late 2016. It had the makings of a really promising trade. There were several positive signals occurring at this time. First it triggered a Stock State Indicator (SSI) — our primary diagnostic tool for stock health — Entry Signal in April 2017. At the time, the Volatility Quotient (VQ) for gold was…
Cognitive Bias Series #2: Debunking the Myth of “Rational Economic Man”
Jul 17, 2018 | Investing Strategies
Imagine the following scenario: You meet your new neighbor at a barbecue and say “So, what do you do?” as you hand him a beer. He tells you that he studies Bigfoot. “But I thought Bigfoot was a myth,” you say. “Have you ever seen Bigfoot?” Your neighbor says no, he’s never seen Bigfoot. He further admits, with a shrug,…
Why We Are Staying Bullish on Oil and Oil Stocks
Jul 13, 2018 | Investing Strategies
One of the first casualties in the opening salvos of the U.S./China trade wars was the price of oil. After trading near $75 on Tuesday, the price of West Texas Intermediate Crude (WTIC) oil dropped to $70 on Wednesday and down below that yesterday. The media tells us that oil traders are concerned that the trade wars could cause a…
