Weekly Wins: Winning By Avoiding the Losers
There are two ways to beat the market. Let's talk about the less obvious method.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
Live Quarterly Meeting Panel Discussion on August 6th at Noon
It's hard to believe that it's been three months since our last Live Quarterly Call, but it has. Summer is winding down, and the kids are getting ready to head back to school. And, we're in the swing of earnings season. I hope you're able to get away and enjoy some time off, preferably while reading your favorite authors on TheStreet Pro!
For the next Live Quarterly Call, I've asked three of my favorite contributors to join us. We'll discuss the current investment environment and whether the market has peaked.
Join me, Helene Meisler, Louis Llanes, and Noah Weidner on August 6th at noon on TheStreet Pro here.
Winning by Not Losing
There are two ways to beat the market. The obvious way is to own the stocks that go up in price faster than the market does. For the last few years, that would mean owning Nvidia and just a handful of other companies.
Had you done so, you'd be very happy! You'd also have subjected yourself to lots of risk and volatility from owning a concentrated portfolio.
The second way is less intuitive, but it's one strategy that some of the best investors use. And it's simple.
Don't buy the stuff that's going down.
Let's review. If you want to beat the market, you can:
- Buy stocks that will beat (aka outperform) the market
- Sell (don’t own) stocks that will underperform the market
Simple, right?
Each week, Bob Lang offers his Bearish Bets, stocks that he thinks will decline in price. He shares these as trading ideas. If you are so inclined, you could either sell the shares short or make a similar bearish options trade against them.
For most people, selling short is a risky move. After all, you can only make 100% on your money if the stock goes to $0. But you can lose an infinite amount if the stock rallies like a meme stock. (to the moon!)
For those of us who aren't active traders, we should still be reading Bob's column, because it can help us to avoid those stocks that are going to be losers.
Effectively, Bob's Bearish Bets can be used to help us avoid those stocks that will underperform the market.
Case in point. This week, Bob offered three bearish ideas, Chipotle CMG, Iridium IRDM, and Dow DOW. Read them at the link below.
This week, all three stocks have suffered. Dow has lost an additional 14%, Iridium is off by 5%, and Chipotle is down nearly 9%.
Sarge Shows that Intel's Dip is a Dead Cat Bounce
While Bob's work is more chart-focused, Sarge, aka Stephen Guilfoyle, combines technicals and fundamentals into a holistic analysis.
In this case, he warns us about Intel INTC and you can read it by clicking the link below.
Sarge starts by saying that "corporate execution is still awful" at former industry leader Intel. After running through sections describing the CEO and his recent investor call, as well as segment sales performance, Sarge tells us what he thinks about the company's future.
Next, he looks at the price chart, offering a technical analysis of the stock.
Sarge concludes that while the easy money was made on the short side, there's too much risk for investors to buy the stock.
And, so far, he's right. Since the article was published, Intel shares are down another 7%.
From Around the Arena
What to do with all of the success from reading TheStreet Pro? Over on Autoblog, Kyle Edward tells us that the Aston Martin DBX 707 is an absolute blast to drive, if you're looking for a $300,000 SUV. You can read his Brutally Honest Review to learn more.
I'm a big fan of Peaky Blinders. The show can be a bit gory at times, but it's well-written with great characters. Men's Journal reports that the 'Peaky Blinders' Creator Will Write the Next James Bond Movie. Any concerns I had about the next James Bond have now been put to rest.
Last, since it's summer, we should remember that we share the earth with other creatures. This video drew me in. A great white shark gets hit by a pleasure boat. The shark survives, though it's hard to know what the future holds for it. Read more (and watch) here in Surfer's Boat Hits Great White Shark: First-Ever Caught on Camera?
