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Warren Buffet says buy when no one else will because of fear and sell when everyone is being greedy etc. and I definitely agree w the first half. Fear is your friend and when investors start selling everything because of a headline event that sounds economically worrisome, and causes a risk-off environment (“risk-off” simply means portfolio managers are reducing positions across the board and moving into cash), you can really find some steals.
The Real Day Trader of Beverly Hills (Stock Bro)
Bryan Anderson
Top Stock Picks a/o 2/26/21
1. Alibaba (BABA)
2. Boeing (BA)
3. Apple (AAPL)
4. Facebook (FB)
5. Paypal (PYPL)
6. Salesforce (CRM)
7. Carnival Cruises (CCL)
8. 23 and Me (VGAC)
9. Airbnb (ABNB)
10. Alphabet/Google (GOOG)
My Core Principles for Day Trading
1) The Devil You Know
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Buy stocks of companies w goods and or services you yourself, or people you know are using/consuming. Starbucks, Facebook, Nike, Google, Apple, Amazon, etc.
2) Growth Companies
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Tech is huge in the growth space because it’s easier to grow an online business, but as always, the growth stocks are also the ones that could disappoint and sell off if analysts and investors feel their growth story has plateaued/peaked. So make sure you get in on companies that are dynamic and looking for new revenue streams etc.
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If you are up for a bit of risk, buy companies with growth potential. Unless you are looking to just invest in “income stocks” or trusty dinosaurs that bring in dividends regularly, if you want stocks that might pop over earnings, they need to be stocks that are growing and can still surprise to the up-side when reporting quarterly earnings. Global companies are top of the list.
3) Take Advantage of Uncertainty
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Uncertainty is your friend if you’re looking to find an entry point on a stock or the market in general. Often times there are events with unclear outcomes that impact investors’ desire to hold a large position in a specific name or large positions in the market as a whole, so they wait on the sidelines until these events are cleared up, often times regardless of the outcome.
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Stock specific events might be an impending fine, expected losses, an upcoming shareholder vote, a regulatory investigation into the company, or any number of things that have investors sitting on the sidelines waiting for this uncertainty to be cleared up one way or another.
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When these sell-offs occur, they often overshoot to the downside, as the selling is indiscriminatory, so even the best stocks will get sold off in order to free up cash.
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Market events might be a presidential election, federal reserve uncertainty with regards to interest rates, or any number of geopolitical events that might make being in the market too risky for some.
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These events are considered overhang if you will, and from my experience more times than not when the uncertainty is known, even if a bad outcome, the stock and/or market moves higher simply because the result is known, and we can now move on.
4) Exploit the Fear Factor
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Warren Buffet says buy when no one else will because of fear and sell when everyone is being greedy etc. and I definitely agree w the first half. Fear is your friend and when investors start selling everything because of a headline event that sounds economically worrisome, and causes a risk-off environment (“risk-off” simply means portfolio managers are reducing positions across the board and moving into cash), you can really find some steals.
5) Forward Quarterly Guidance is Huge
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A company can beat analyst estimate on the top (revenue) and bottom (net income) lines but investors REALLY care about guidance for the upcoming quarter. An incredible blowout quarter may actually be ignored completely, if management is being humble about their next quarter and guides revenue etc. lower than expectations.
6) Growth Stalling = Get out!
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Companies will issue “profit warnings” when they can see early on in a new quarter that they are not going to meet their initial assessment. Stocks usually tank on the headline, then may recover some from the lows, before drifting lower until more clarity on the company is known.
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Growth is everything and if it’s stalling even in the slightest way, it can destroy even the best stock. If quarterly earnings hit and you see that growth missed estimates, and revenue is decelerating, it’s going to clobber the name. The selloff is gonna be intense and most won’t touch the name again anytime soon until the company proves it’s growing again. These I find are the worst, and “the first cut is the cheapest” if you own one.