Frequently Asked Questions
With so many stocks that we have reported on that are acting well, the temptation might be to try and “kiss all the babies,” so to speak, but that is not possible. In order to make big money, one must try and focus on what one perceives, based on the objective evidence, are the biggest potential leaders as the market gets going. Thus if we have a good position at a good price in a new, emerging leader that has some aspects of “new” in it, like INVN or SAVE (as of February 8, 2012), for example, there is no need to tamper with it or sell off a position that might be consolidating recent, strong gains in favor of something that is “moving” today. For example, Monster Beverage did not move much on Thursday and Friday when the market was up, but that is fine. Since it is often the characteristic of a leading stock to move up on days when the general market may be flat or even down, one should not be surprised if such leaders “rest” on a day when the market is up. As long as the stock is resting normally, there is nothing to do, and chances are if you bought something like MNST at around 100 and sell it after a quick 5-6% gain, the stock will then just move higher without you later on. Even looking at the daily chart of MNST we can see that the stock is perched along its 10-day moving average, and a continuation pocket pivot buy point could emerge at any time, perhaps even on a day when the market is going down, so for now that is all you need to focus on with MNST: the next buy point.
When we issue a report on a new stock, and you have no more room in your portfolio, you could sell your weakest stock to make room for the new one. When done right, this has the effect of force feeding your capital into the strongest stocks. In other words, you cut out the slower/weaker names to make room for the strongest ones, keeping in mind that strong stocks will go through brief resting periods as discussed above, especially after making big gains.