The recent volatility has a lot of people asking, “What happens next?” While it would be nice to know the future (and nobody does) – it might be wiser to ask, “What is the trend?” While knowing the trend is really one of the most important “truths” get right, it is not as simple as it sounds. But if you stay on the right side of a trend, the market is your friend. What you want to be involved with are major trends, big sector moves, and the outsized returns that come from the best companies in pockets of growth.
One of the great expressions is that the trend is your friend; right until the end. Anyone can draw a line between two points and draw a trend line, but to be really successful in the stock market, you want to know the trend of the market itself, the economy, the stock you are interested in, and the sector the stock is in. Current charts are offering various stories to both bulls and bears alike. Some uptrends have been broken, and new uptrends have been initiated. All you want do to as an investor is stay on the right side of the market.
This last shakeout helped to identify some true market leaders. I like to see how the leaders rank on The Magnet® Stock Selection Process. I have recently shared Will Rogers and his theory of sticking with winners only! You need to be unemotional. I have been stopped out of both longs and shorts recently. Currently, the holdings in our current portfolio look great. Staying unemotional and letting the portfolio “reset” and “not being attached to any holding.” We just want to stay on the right side of the trend, which is up. Up for the trends in the economic news including employment, construction, and manufacturing. Expect higher prices and more volatility along the way.
Longs- Omega Protein Corporation (OME), Lannett Company, Inc. (LCI), Federated National Holding Company (FNHC)
Shorts- BroadSoft, Inc. (BSFT), Chico's FAS Inc. (CHS), Elizabeth Arden, Inc. (RDEN)
By Jordan Kimmel, Chief Investment Officer at Investview, Inc. (INVU).