14 Nov
Blog, Top 10 Lists

Best & Worst YTD %Change IPO's

Portfolio managers are always looking for new merchandise. A great majority of history’s greatest winners tend to enjoy their best run in the years following their IPO. Here is FindLeadingStocks.com’s Special Report of 20 Best & Worst IPO’s in 2013. It’s good to keep your eye on the new merchandise for early (stage 1) breakouts.

Best IPOs YTD
TickerCompanyLastFiling PriceIPO Date1st  Day Close% GainSector
INSYInsys Therapeutics, Inc.$44.31$85/2/2013$9.70356.80%Health Care
GWPHGW Pharmaceuticals PLC Sponsored ADR$35.45$95/1/2013$8.98294.80%Health Care
PETXAratana Therapeutics, Inc.$20.40$66/27/2013$8.26147.00%Health Care
QIWIQiwi Plc Sponsored ADR Class B$41.68$175/2/2013$17.08144.00%Tech
EMESEmerge Energy Services LP$37.36$175/9/2013$16.55125.70%Energy
XONEThe ExOne Co.$59.00$182/7/2013$26.52122.50%Tech
AFHAtlas Financial Holdings, Inc.$13.00$62/12/2013$5.95118.50%Financials
ADHDAlcobra Ltd.$16.02$85/22/2013$7.55112.20%Health Care
ECOMChanneladvisor Corporation$38.19$145/23/2013$18.44107.10%Tech
STMLSTEMLINE THERAPEUTICS INC$23.23$101/29/2013$11.8096.90%Health Care
Worst IPOs YTD
TickerCompanyLastFiling PriceIPO Date1st  Day Close% LossSector
RNAProsensa Holding NV$3.68$136/28/2013$19.25-80.90%Health Care
LPDXLipoScience, Inc.$4.12$91/25/2013$10.45-60.60%Health Care
CYNICyan, Inc.$4.40$115/9/2013$11.14-60.50%Tech
MODNModel N, Inc.$8.89$163/20/2013$19.98-55.50%Tech
OMEDOncoMed Pharmaceuticals, Inc.$12.47$177/18/2013$27.18-54.10%Health Care
TRMRTremor Video, Inc.$4.15$106/27/2013$8.50-51.20%Tech
KBIOKaloBios Pharmaceuticals, Inc.$4.15$81/31/2013$8.00-48.10%Health Care
MRINMarin Software, Inc.$10.06$143/22/2013$16.26-38.10%Tech
FMIFoundation Medicine, Inc.$22.97$189/25/2013$35.35-35.00%Health Care
BINDBIND Therapeutics, Inc.$9.42$159/20/2013$14.30-34.10%Health Care

Source: CNBC Analytics
 

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19 Apr
Best Trading Tips, Top 10 Lists

Valuable vs Invaluable Information

Info
Conclusion: The Most Valuable Information is Price Action:
In theory, information should make the stock market’s world go round. Information about companies and their ability to make money in the future is what should determine share price. As the market learns of new information, price is adjusted up and down to reflect the value of that information.
This implies that investors should focus their analysis on information so they can predict where share prices should go in the future.
While this makes good sense, I have found it to be extremely rare that investors who use information are able to consistently beat the stock market. With smaller retail investors in particular, the use of information for making investing decisions is more destructive than it is beneficial.
10 Reasons Why Using Invaluable Information May Be Destructive To Your Bottom Line:
1. Information Causes You to Ignore the Market’s Message – when you have an understanding of a company’s story, there is a tendency to fall in love with that story and ignore new information that goes against your outlook for the stock. This leads the committed shareholder to hang on to a losing position, allowing the loser to bog down the performance of the overall portfolio.
2. The Market May Not Be Trading On Fundamentals – in theory, stock price is based on the present value of future earnings expectations. In practice, there are often very non fundamental influences on share price. A large investor that has a liquidity crisis may be forced to unload a large position with little regard for price. Often, the laws of supply and demand affect share price even though theory tells us that they should not have an influence.
3. Your Interpretation May Not Be the Same as The Market’s – Our mood affects how we judge information and the same can be said for the market in general. Your fundamental analysis may be correct in an optimistic environment, but if the market is in a pessimistic mood, the investment can lead to losses. Even the market is wrong, it is right.
4. We Tend to Focus On Information That is Easy to Get – we often looks for the easiest way to achieve a goal. With information, there is a tendency to focus on the information that is front of us. Rather than work to find something to disprove our thesis on a stock, we instead look for information to strengthen our thesis. In doing so, we present our own biased outlook for our investment decisions that can often be very incomplete and wrong.
5. Information is Usually Already Priced In – most investors use publicly available information. That means it is widely known and available to anyone considering the stock. If information is available to a large number of investors then we should expect that the market will have priced that information in to the stock. Therefore, the information has not value to us.
6. Information Usually Comes with a Bias – as a general rule, people do what they are financially motivated to do. If someone is encouraging you to purchase a stock, there is a good chance that they have some financial motivation to do so. Before you trust the information you receive, understand the financial motivation. If you find the reason, you will often usually find that there is a strong bias in the information being provided to you.
7. Trading on Truly Insider Information is Illegal – there are few risk free trades in the stock market, but trading on significant, inside information is one. You stand to make a lot of money buying stock in a company that will be acquired by another at a premium tomorrow. If you have that information and act on it, you are trading on inside information and that can land you in jail.
8. Gathering Good Private Information is Expensive and Time Consuming – there are investors who are able to uncover information that is not priced in to a stock but is not considered inside information. This private information is valuable because it can lead to market beating returns. However, gathering private information typically requires significant resources, knowledge and time. For small investors, it is not feasible to do this kind of work across a broad range of stocks.
9. You May Not Have All of the Information You Need – the market tends to focus on two or three key information points that affect the price investors are willing to pay for it. An investor who does a thorough fundamental analysis of the stock may still have an incomplete understanding of the company’s business. If missing one of the key points, this investor can make a gross error in valuing the stock.
10. There Is No Standard for What Information is Worth – There are many formulas for determining what a company’s share price should. Many fundamental analysts look for stocks to trade at a certain multiple of their earnings with that multiple to be based on growth. However, there are great variations in accounting methods that can have a profound effect on how earnings are reported. More importantly, there is no rule that a company should trade at a certain multiple of earnings, that target multiple is just an opinion.
Bottom line:
Ultimately, I look at the market’s interpretation of all available information when I look at a chart of price and volume. It shows not only every bit of information detail but also what the market thinks of it.
Source: Stockscores.com Perspectives for the week ending April 9, 2013
 

14 Nov
Best Trading Tips, Top 10 Lists

10 Ways To Control Your Emotions On Wall Street

Emotions


Fear and greed drive investor decisions in destructive ways. People want to buy stocks that have been going up for some time because their market performance gives legitimacy to the story. A stock that is falling sharply brings out sellers eager to get out because of their fear that the stock will go lower.
You have to know the difference between a strong stock that is going higher and one that is near its top. Stocks that are falling can be sold before the fall farther, but at a certain point they get so low that they are worth considering. We have to learn to overcome our emotions so that we can buy stocks that are starting to go up and sell stocks when they start to go down.
Here are 10 things you can do to overcome your emotions and become a better investor:
1. Use Strategies that Work
Your approach to the market won’t have a hope if your analysis methods are not effective. There are many ways to analyze stocks, take one that you like and test it until you have confidence that it works.
2. Write a Trading Plan
Success has a better chance of happening when you write down a plan to get there. Make your plan include your rules for entry and exit, risk tolerances and a process for review. Adapt your plan over time as you find better ways to achieve success.
3. Manage Risk
Understand the risk in every trade you make and don’t take risks that you can not tolerate. If your exposure to loss is more than you are comfortable with you will inevitably break your discipline.
4. Limit Losses
You should always know where the exit door is in case something goes wrong. When you buy a stock, decide the point where the market will have proven your decision to enter wrong. If the stock falls to that price, get out. Don’t let small losses grow in to big losses.
5. Blame Yourself
There may be a good argument for why a loss you have suffered is someone else’s fault. The newsletter writer could have been wrong, the media could have been wrong, the government could have gone back on a promise, the company could be corrupt. Blaming others will never get your money back. You will not change the actions of others, you can only change your own. Therefore, blame yourself for everything that happens with your money and take steps to make it better.
6. Stop Falling in Love
The more you know about a company, the more likely you are to ignore the market’s message. Companies want you to own their stock; the more investors that they get to own their stock, the higher the price goes. As a result, there is a bias to the information that you are exposed to, if you listen too much you may miss activity in the market that is telling you that something is wrong.
7. Practice Patience
Up trends start slowly so you have to be patient when stocks are trying to start a long term trend. The profit is in the patience, hold on to strong stocks so long as they are showing strength. When looking at a company, avoid a short term outlook that can mislead you about the long term trend.
8. See the Other Side of the Story
Everything you know about a stock may tell you to buy it and you may do so with complete commitment. But, always ask yourself, “Why is someone willing to sell to me at this price.” If you understand their motivations for selling versus your motivations for buying, you can better determine who is right. Without an understanding of the other side of the trade you can not determine whether the other side is wrong.
9. Avoid the Herd
The crowd usually loses. When buying, look around at your fellow buyers. Are they well informed, smart investors or are they generally uninformed people watching 60 Minutes? Always try to be one step ahead of the herd.
10. Analyze Your Results
The market is always evolving, making constant evolution in your approach to the markets important. On a regular basis, analyze your trades and looks for patterns of self destruction. Make changes as necessary.
Source: Stockscores.com Perspectives for the week ending May 4, 2012
 

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09 Jun
Best Trading Tips, Top 10 Lists

10 Ways To "Think" Like A Successful Investor

Think Less


Think Less
Source: Stockscores.com Perspectives for the week ending May 26, 2012
You cannot expect to do well in the market if you look at investing in a normal way. By definition, being average is doing what most other people do and since investing is largely a psychological game, doing what other people do is only natural. Average results come from normal people acting in normal ways.
To beat the market, you have to be different.
Not necessarily in a straight jacket bouncing off padded walls different, just a little off.
Here are 10 things that may help you be a better investor, some ways to think differently from the crowd in that pursuit to achieve market dominance.
1. Do not think about making money, think about losing money – the first step toward success is accepting that losing is part of trading. You will not be right all of the time, you cannot always trade your way out of a bad situation. There will be times when you simply have to walk away with a loss. The key is to keeping the losses small and manageable. When the market proves you wrong, take the loss.
2. Do not think you can average down to win – it is a logical idea, add more to a losing position with the expectation that the market must eventually go your way. Many times this strategy will work but, when it does not work, the loss may be insurmountable. The market does not eventually have to go your way.
3. Do not think that your success is entitled – you may make a great trade, pick a really great stock and have a feeling like you really have the market figured out. Forget your gloating, no one ever has the market figured out. We must always remember that we have to work as smart for the next trade as we did for the last.
4. Do not think that talent is required – making money in any trading endeavor is a small part technical skill and a big part emotional management. Learn to limit losses, let winners run and be selective with what you trade. Emotional mastery is more important than stock picking skill.
5. Do not think that you can tell the market what to do – the market does not care about you, it does not know that you want to make a profit. You are the slave, the market is your master. Be obedient and do what the market tells you to.
6. Do not think you are competing against other traders – trading success comes to those who overcome themselves, it is you and your persistent desire to break trading rules that is the ultimate adversary. What others are doing is of little consequence, only you can react to the market and achieve your success.
7. Do not think that Fear and Greed can ever be positive – in life, fear can keep us from harm, greed can give us the motivation to work hard. In the market, these two emotional forces will lead to losses. If your decisions are governed by either or both you will most certainly find that your money escapes you.
8. Do not think you will remember everything you learn – every trade provides a lesson, some valuable education on what to do and what not to do. However, it is likely that your lessons will contradict one another and lead you to forget many of them. Write down the knowledge that you accumulate, return to this trading journal so that you can retain some value from the lessons taught by the market. Remember, the market is cruel, it gives the test first and the lesson after.
9. Do not think that being right will lead to profits – you may be exactly right about what the fundamentals are and what they are worth. However, timing is everything, if your expectations for the future are ill timed, you may find yourself losing more than you can tolerate. Remember, the market can be wrong longer than you can be liquid.
10. Do not think you can overcome the laws of probability – traders tend to be gamblers when they face a loss and risk averse when the have a potential for gain. They would rather lock in a sure profit and gamble against a probable loss even if the expected value of doing so is irrational. Trading is a probability game, each decision should be made on the basis of the best expected value and not what feels best.

02 Sep
Best Trading Tips, Top 10 Lists

Do Not Think

You cannot expect to do well in the market if you look at investing in a normal way. By definition, being average is doing what most other people do and since investing is largely a psychological game, doing what other people do is only natural. Average results come from normal people acting in normal ways.
To beat the market, you have to be different.
Not necessarily in a straight jacket bouncing off padded walls different, just a little off.
Here are 10 things that may help you be a better investor, some ways to think differently from the crowd in that pursuit to achieve market dominance.
1. Do not think about making money, think about losing money – the first step toward success is accepting that losing is part of trading. You will not be right all of the time, you cannot always trade your way out of a bad situation. There will be times when you simply have to walk away with a loss. The key is to keeping the losses small and manageable. When the market proves you wrong, take the loss.
2. Do not think you can average down to win – it is a logical idea, add more to a losing position with the expectation that the market must eventually go your way. Many times this strategy will work but, when it does not work, the loss may be insurmountable. The market does not eventually have to go your way.
3. Do not think that your success is entitled – you may make a great trade, pick a really great stock and have a feeling like you really have the market figured out. Forget your gloating, no one ever has the market figured out. We must always remember that we have to work as smart for the next trade as we did for the last.
4. Do not think that talent is required – making money in any trading endeavor is a small part technical skill and a big part emotional management. Learn to limit losses, let winners run and be selective with what you trade. Emotional mastery is more important than stock picking skill.
5. Do not think that you can tell the market what to do – the market does not care about you, it does not know that you want to make a profit. You are the slave, the market is your master. Be obedient and do what the market tells you to.
6. Do not think you are competing against other traders – trading success comes to those who overcome themselves, it is you and your persistent desire to break trading rules that is the ultimate adversary. What others are doing is of little consequence, only you can react to the market and achieve your success.
7. Do not think that Fear and Greed can ever be positive – in life, fear can keep us from harm, greed can give us the motivation to work hard. In the market, these two emotional forces will lead to losses. If your decisions are governed by either or both you will most certainly find that your money escapes you.
8. Do not think you will remember everything you learn – every trade provides a lesson, some valuable education on what to do and what not to do. However, it is likely that your lessons will contradict one another and lead you to forget many of them. Write down the knowledge that you accumulate, return to this trading journal so that you can retain some value from the lessons taught by the market. Remember, the market is cruel, it gives the test first and the lesson after.
9. Do not think that being right will lead to profits – you may be exactly right about what the fundamentals are and what they are worth. However, timing is everything, if your expectations for the future are ill timed, you may find yourself losing more than you can tolerate. Remember, the market can be wrong longer than you can be liquid.
10. Do not think you can overcome the laws of probability – traders tend to be gamblers when they face a loss and risk averse when the have a potential for gain. They would rather lock in a sure profit and gamble against a probable loss even if the expected value of doing so is irrational. Trading is a probability game, each decision should be made on the basis of the best expected value and not what feels best.
Source: Stockscores.com Perspectives for the week ending August 27, 2011

16 Jun
Best Trading Tips, Blog, Top 10 Lists

Alan "Ace" Greenberg on The Rise & Fall Of Bear Stearns

I had the pleasure of meeting a true Wall Street legend, Alan “Ace” Greenberg, former Chairman and CEO of Bear Stearns, on Tuesday June 15, 2010 at an exclusive gathering hosted by Manhattan’s 92Y. Ace, a celebrated man and genius in his own right, spoke to a full and rather eager audience on his many decades on Wall Street as depicted in his latest book: The Rise & Fall of Bear Stearns. 
Ace joined Bear Stearns in 1949 and rose to the top when he became CEO in 1978 and Chairman of the Board in 1985. The Bear Stearns team comprised of a little over 100 employees in 1949, and at its peak it topped 15,000! Ace is credited for building Bear Stearns into what was an international investment banking powerhouse and continues to be renowned for his character, sense of humor, and intellectual decision making.  Ace shared his personal account of what actually happened at Bear Stearns during the credit crisis of 2007-2008, a devastating recollection of events that spared no one, not even himself.
This financial crisis is well described in his book, however here are some highlights from the evening including some personal advice from Ace:

  1. In order to be successful on Wall Street: you must work hard, love what you do, respect risk, and learn how to have influential people take a liking to you.
  2. Long Term Capital Management was not a systematic failure. The media blew it out of proportion. Bear Stearns cleared for LTCM and that is why he voted against giving any more money to save the ailing fund (because they already had a ton of exposure).
  3. LTCM: The country was not going to fail, only a handful of people were going to fail because Warren Buffet and AIG were willing to buy LTCM’s liabilities for a deep discount, but LTCM declined.
  4. The investment banking  business model is dead (Because investment banks can not withstand a run on the bank like commercial banks can with the assistance of the US gov’t).
  5. “Anyone who invests money and neglects to calculate the risks at hand with a cold eye has no business in our business.”
  6. “The best risk managers instinctively anticipate the fullest range of plausible outcomes.”
  7. It is very important to make money but that should not be your only goal.
  8. False rumors about Bear Stearns (not being properly capitalized) are what caused the firm to fail.
  9. “No problem is an isolated problem.”
  10. It is very important to remain diversified. All his stock was not in Bear, therefore he personally didn’t lose everything.
18 May
Blog, Richard Donchian, Top 10 Lists

Richard Donchian's Trading Rules (Father of TrendFollowing)

Richard Donchian developed a plan in 1934 (no, that is not a typo) that he soon published as a set of guidelines. The majority of those guidelines are still relevant to every investor today:

  1. Beware of acting immediately on widespread public opinion. Even if correct, if will usually delay the move.
  2. From a period of dullness and inactivity, watch for and prepare to follow a move in the direction in which volume increases.
  3. LIMIT LOSSES, ride profits – irrespective of all other rules.
  4. Light commitments are advisable when a market position is not certain.
  5. Seldom take a position in the direction of an immediately preceding three-day move. Wait for one-day reversal.
  6. Judicious use of stop orders is valuable aid to profitable trading.
  7. In a market in which upswings are likely to equal or exceed downswings, a heavier position should be taken for the upswings for percentage reasons – a decline from 50 to 25 will net only 50% profit, whereas an advance from 25 to 50 will net 100%.
  8. In taking a position, price orders are allowable. In closing a position, use ‘market’ orders.
  9. Buy strong acting, strong background (markets) and sell weak ones, subject to all other rules.

 More information is available here: http://en.wikipedia.org/wiki/Richard_Donchian
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02 Dec
Top 10 Lists

10 Hidden Treasures For Success In The Market

What’s Holding You Back?

At times, making money in capital markets (stocks, commodities, etc) can be tough… very tough. What separates the winners from the losers? This is the million, Billion dollar question! There are many reasons why some investors/traders become successful beyond expectation, while others fall short. This post will discuss some common factors crucial to finding success in the market. Please note that this article is not about selecting a trading system or developing a sound set of rules. It simply outlines how to identify and understand the common hurdles which hinder most, if not all, investors at some point in their career.

10 Hidden Treasures For Success In the Market:

1. What Do You Want? Ed Seykota, a famous trader, once said, “Everyone gets what they want from the market. Some people want to win, and they win. Some people want to lose, and they lose, other people want to gamble (i.e. have fun) and they gamble.” Before you continue reading this post, list your wants (i.e. in life and the market) then write them down. Writing them down helps turn a thought into a tangible goal, this is a critical and often overlooked step. As often as possible (daily), review your list and adjust it when necessary to make sure your day to day actions are aligned with your “wants”. This is one very powerful secret to success!

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