We help you discover investing ideas you can execute and profit from by focusing on trades that maximize your upside and limit your downside.
Every day we look for investment opportunities. Our mission is to provide you with ideas and research you can execute and profit from.
We express our ideas through stocks and ETFs.
Our goal is to generate ideas that earn a better return than a low-cost ETF such as SPY.
This service costs $100 per year.
Do you offer refunds?
Whether the refund policy was 30, 60, or 90 days, those time periods are too short to determine if our product would be a good fit for you.
We encourage you to try our product for one year. If it's not a good a fit, you can turn off auto-renew by logging into your account.
Why just the yearly option?
We believe you will have more success as an investor thinking long-term.
We want to encourage practices that support that goal.
Paying yearly allows you to wait for good opportunities to come your way.
Important: We are aiming to be in the top 10% of investment performance. In order to achieve that, there is a chance we will end up in the bottom 10% if our trades don't work out.
Sometimes they won't. That is the tradeoff. Nothing is guaranteed.
In fact, if you can't stomach your portfolio going down 50% or more, you should not be investing in equities at all.
Two to three times in your life, your portfolio will go down by at least 50%.
View that as an opportunity, not a time to panic.
How will you manage risk?
All trades will have a level where we will exit. We are not in the business of holding losing trades.
Our portfolio will hold between 10-20 positions. We recommend limiting a single position to no more than 10% of your portfolio.
If you are a beginner or not experienced in handling drawdowns, bump the amount risked down to 1-5% per position.
One thing you cannot afford is a catastrophic loss you cannot recover from.
What's your strategy?
We are a top-down investor (macro) and look for non-consensus ideas. We look for trades that will play out over a 3-5 year time frame.
What does that mean?
Instead of starting with an individual company (bottom-up), we look at the entire world and try to find opportunities other investors are overlooking.
In order to earn above-average returns, you have to construct a portfolio that is different than other investors.
You have to find ideas that other investors do not believe in or see as an opportunity.
We have to be right. We won't know in advance if we will be right. We must use our judgment and assess the probabilities as best we can.
We must leave our ego at the door and be willing to change our mind as new information becomes available.
To achieve above-average returns, we must find ideas that are non-consensus AND we have to be right. See diagram below.
Ok....so how do you evaluate ideas?
- We find ideas that are non-consensus (fundamental)
- We use charts to time our entry (technical)
• On 90% of our trades, we have specific upside price targets and a stop to protect our downside. We aim for a reward/risk of 3/1 or greater. Meaning, we look to make $3 dollars for every $1 dollar we put at risk.
• Occasionally, we think we have an insight into a company or trend and will make an investment without having an upside price target and downside stop.
Let's walk through a trade we took in October 2017
On May 24, 2016, Barron's published this piece about Twitter.
As luck would have it, Twitter bottomed on that exact day at $13.73.
Since then, Twitter has gained almost 250% over a two period.
On October 30, 2017, we issued a trade alert to our members.
PREMIUM trade alert issued.
— Caleb Dismuke (@jcd5816) October 30, 2017
(click chart to enlarge)
We bought Twitter for $21.73 (orange arrow). Since then, we have taken profit on half our position for 100% gain in less than a year.
Why did you decide to buy then?
We bought because the buyers gained control from sellers above $20.
Take a look at the 4 short red arrows on the chart. Those represent times where the sellers maintained control below $20. In other words, every time price approached or briefly traded above $20, the buyers could not maintain control above that level.
Until the week of October 30th. The buyers finally maintained control above $20.
That's why we bought. Something changed from the previous 4 times that caused the buyers to lose control above $20.
In addition, the upside (price appreciation) justified the downside (our stop) so that if we were right, we would get a nice payout.
We found a non-consensus idea, we used charts to time our entry, and we ended up being right.
Will that happen all the time?
No. We will be wrong sometimes, but that is part of the game.
That trade could have turned out differently.
In investing, it's helpful to think of the counter-factual, or what "could" have happened.
Twitter could have died. There was some probability it would and still might.
Friendster(the social network killed by Facebook) did die. It went to zero.
The skill is knowing when a company will bounce back and when it will not.
You have to use your judgment and asses the probabilities as best you can.
You have to decide if the potential upside justifies putting money at risk.
To achieve superior investment results, it comes down this...
You have to have a better-than-average ability to figure out when risk-taking will lead to gain and when it will end in loss.
There is no alternative.
Better-than-average judgment, executed consistently over time, is what separates the great from the average.
We hope to be great, but there is no guarantee.
What will you invest in?
- Russell 1000 stocks-The largest 1000 publicly held companies in America. These stocks make up 90% of the American public equity market. Basically, mid and large-cap stocks.
- ETFs-These will include index, sector, foreign, and other specialty ETFs.
Past picks and performance
The performance will be updated once per quarter. Members can see the current portfolio anytime by logging in.
Updated at the end of June 2018. Next update: September 2018.
- Gilead Sciences | GILD | Open date: 07/03/2017 | Gain/loss since open: +0.00%.
- Gold Shares | GLD | Open date: 07/18/2017 | Gain/loss since open: +0.4%.
- Twitter | TWTR | Open date: 10/30/2017 | Gain/loss since open: +106%. (Took profits on half position on 6/25)
- Bed Bath & Beyond | BBBY | Open date: 02/14/2018 | Gain/loss since open: -18.53%.
- United Therapeutics | UTHR | Open date: 06/04/2018 | Gain/loss since open: +13.27%.
- Baker Hughes | BHGE | Open date: 04/05/2018 | Gain/loss since open: +13.13%.
- Twitter | TWTR | Open date: 10/30/2017 | Close date: 6/25/2018 | Gain/loss: +108.64%. (Took profits on half position on 6/25)
- W W Grainger | GWW | Open date: 09/12/2017 | Closed date: 01/29/2018 | Gain/loss: +65.05%.
Do you have any skin in the game?
A question you should ask all who are selling you advice, especially financial advice.
Yes, we do have skin in the game. Our real money is at risk.
What You Get
In 3 simple steps.
- Download the Robinhood app to your phone or use your existing brokerage app.
- Subscribe to the newsletter.
- After you subscribe, execute the trade ideas or use them as a starting point for your own research.
Wealthfront, Betterment, and Vanguard offer low-cost index products for your retirement account.
I believe a portion of your money should be set aside to take aggressive risks. That is the purpose of this newsletter. To produce trading ideas that will outperform a low-cost index.
I have never worked for a fund or investment bank. I am self-taught. I was mentored by a trader in Chicago.
I started trading during the 2008/09 financial crisis. I believe my results and analysis will speak for themselves over time.
There are no secrets to this business. To be successful, one must exercise good judgment, common sense, discipline, and patience.
I'm not perfect. I will make mistakes, have drawdowns, and sometimes just be wrong.
But I will be transparent and honest about my results.
An investment professional's goal should be to earn and build trust with their clients, and that is my hope, to build trust with you.
5-20 per year.
Good ideas don't surface on a regular schedule. We must be willing to sit on our hands most of the time.
A year or greater.
That is not a hard rule as we have to adapt to changing market conditions but our goal is to hold as long as it makes sense.
Via email. Detailed write-ups will be posted on the website.
• Members can reach me by email.
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If you want to renew for another year, you will have to do it manually.