I don’t believe in buy and hold – or hold and hope.
Hold and hope is how Warren Buffett’s Berkshire Hathaway (BRK/A) is being run right now.
Buy a stock, wait, wait some more, hope that something works out.
This works sometimes, but since March of last year to now – it hasn’t. Berkshire Hathaway has continued to trail even the baseline return of the S&P 500 Index.
Berkshire Hathaway & S&P 500 Index Total Return Source Bloomberg
Stocks need to be traded.
You find a stock that has the goods to go – buy it as it surges. Then ride it up a bit, taking money off of the table along the way, and exit before the last buyer shows up.
This is how I do it. And how I continue to coach you on how to profit from my surge stocks that I present each and every week here in Traders Daily Direction.
To see the full rundown on my current surge stocks, you need to check out my current Watch List.
And if you haven’t seen my latest Stealth Trades Watch List, I encourage you to check it out right here.
My Stealth Trades system continues to find even more impressive companies that are going unnoticed on Wall Street…
Now, let me explain why Buffett’s approach sets you up for big losses and how I work to get you to book gains week in and week out.
Lose & Like It
That’s how much long-term investors need to be prepared to lose.
At least that’s what the “experts” say…
“You’ve got to be prepared when you buy a stock having them down 50 percent or more and be comfortable with it – as long as you’re comfortable with the holding.” — Warren Buffett
Uh-uh. No way. I would never sit through a 50% decline.
No offense to the Oracle of Omaha… but no.
Then again, I don’t believe in buy and hold. It makes no sense.
The world changes too rapidly. New technologies up-root old ones every day.
Once dominant firms are dethroned in no time by up-and-coming startups.
And behavioral trends are evolving at the fastest rate in history.
Slack (WORK) didn’t even exist a few years ago. Today, it is worth $530 billion.
3D printing was all the rage a few years back as epitomized by 3D Systems (DDD).
Those who got in early saw their investments soar over 2,100%.
Unfortunately, the “buy and hold” strategy gave it all back.
This time is no different.
Stocks like Zoom (ZM), Peloton (PTON) and Teledoc (TDOC) produced huge gains during the pandemic.
But each has fallen over 50% from their 2020 highs.
The same thing happened during the tech bubble of the 1990s. And it will continue to happen for decades to come.
Historically, market-leading stocks have an 80% chance of declining by 50% or more after putting in a major top.
Those aren’t good odds.
The only investors who actually PROFIT from major moves in the market are those who know when to sell…
The ones who nail down profits when they are on the table and recognize when the party’s over.
No one wants to be the last one in – to buy at the highs just before things go south.
The only thing worse?
Buying early, seeing a big open gain, then letting the market take it all back.
My Way Works
Set a target. Use a stop loss. Take profits along the way.
Just don’t leave yourself at the mercy of the market.
Remember: Bulls make money. Bears make money. But pigs get slaughtered.
I prefer to run with the bulls…
One Last Thing
As I have been discussing in Traders Daily Direction, I am ramping up my insider stock buying research that is part of my Stock Surge Indicator (SSI).
I just did a live coaching event that was all about insider buying and how it works to find stocks that are set to rally higher and stronger.
For those of you that joined me, I enjoyed your participation and I know that we covered some profitable ground.
I have developed a new product that we’ve recently launched here at Traders Agency called Insider Edge.
It’s all about one of my common-sense tools that finds stocks with big surges in the works that are tipped off by insiders’ buying their own shares.
To get the full rundown on how to profit by buying stocks that insiders are buying right now and learn more about Insider Edge at Traders Agency, click here right now.