TradeStop

There is much debate about buying "expensive" stocks. In short, many investors feel they should be avoided at all costs. Other investors choose to sell a stock when profitability slows, drops substantially, or is unprofitable.  I believe that the chart above shows that selling simply based on valuation or declining profitability (or a company being unprofitable), one may miss out on tremendous gains. Many would consider NOW " expensive" at several points along the way, as the PS ratio hovered between 7-10. But buying at those levels delivered fabulous returns. NOW experienced multiple drops profit margins (as well as spikes in valuation). But the stocks became a multibagger regardless of profitability challenges (unless on bought only around the peak of the Dot Com bubble or the 2021-2022 top). The constant in the chart is that revenue continued to grow year after year. This is why some investors say that revenue growth is the most important factor in a stock's ...

  Some buying came in today -- particularly for tech and growth stocks. Is this a good time to buy? I don't know and cannot predict the market. But I will explain some reasons why I'm hesitant. I have already done buying in this range of the SP500 (the green arrows). As such, I don't feel l'd be buying at a substantial discount compared to earlier buys. If I was just starting to invest in growth stocks, I'd consider this an excellent time to begin (slowly) DCAing into some beaten-down growth stocks (such as CRWD, which is in the Model Portfolio). A couple days does not necessarily make for a reversal. We've seen many false starts this year (the blue arrows). It's tempting to buy when stocks, especially the ones we love, start running up. But that can be premature and especially so considering we are, IMO, likely to see some kind of recession. If I were starting to invest in growth stocks now and going to DCA slowly, I'd be looking at NOW, PAYC, and NET, ...

This is the SP500 during the Dot Com Bubble. Notice how fast the market ran up compared to the bullish channel afterward. The Dot Com Bubble was a Parabolic Move Up. From what I've seen, major parabolic moves up tend to retrace. This is a bird's-eye view of the SP500. Notice how fast the market moved up starting in 2020. Here is another parabolic move- up. Sure enough, we are seeing a retrace. A parabolic move up can signify that the market is way too hyped. Many people and institutions are buying regardless of stock valuation and company quality. Hyper-growth stocks were providing the biggest returns, and so big money went into ARKK/ARKF-type stocks. Many of the companies bought up were relatively high-quality. However, many of them were unprofitable and richly valued. Those are the companies that have sold off the hardest. But at a certain point, good growth stocks kept selling off regardless of valuation, profitability, and company quality. An extremely high-quality company ...

Here is the Master Chart at present. I'm going to use SPY as there is a problem with the chart I typically use on Investing.com   SPX bounced down from the upper trend line. Now the question is, "How far does the SP500 dip?"   Of course, we don't know. But, we can use technicals, history, and macro-conditions to make educated guesses. The FED and the European Central Bank seem hellbent on causing a recession in order to get inflation under control. That being the case, I would not be surprised if we retest the 2022 lows or even dip lower. The three spots I have my eye on are the retest point, 3,200, and 3,000. Those are each levels of support. If the 2022 lows are hit, followed by an indicator candle/s, then 3,200 may be next. The same may be true of 3,200 to 3,000. How does this information help? Well, there is no certainty, but I shall provide a couple examples. When I saw the 2022 low start heading up, I suspected that was a significant dip and a good time to buy. ...

I'm adding two shares of MA to the portfolio @ $346. While MA is more expensive than I prefer, I wanted to add a stock that 1.) Provides some defense in a recession, and 2.) Has long-term upside.  With a hawkish FED -- and European Central Bank -- I would not be surprised if the portfolio enters negative territory. It could drop 10, 20, 30%, maybe more. It's impossible to know how far a stock will rises or fall. But I like the valuations I purchased the stocks at, and I do not intend to sell them. The rounded portfolio allocation is: CB                     14% CRWD             23% GOOGL          22% MA                   14% SNOW             27% As of today, the Model Portfolio is +1.1% I'd like to add ASML at a lower price. Semi-conductors are vital to technology, and exposur...

I've been watching some charts closely looking for indicators. A number of stocks are showing topping-type behavior. Stocks that look topped (for now at least) I am in no rush to add. They may still have room to run (if the market reacts favorably to the FED meeting plus historically strong moves up in mid to late December). But zooming out to a macro view of SPX, a pullback would fit the 2022 pattern.   CELH is also quite expensive 72 Price to Cash Flow FWD. CELH's growth potential is tremendous, but the stock may trade at an elevated valuation for the foreseeable future. The golden star on the CELH chart represents a retrace of the parabolic that began in November. The golden star of the SPX chart represents the predicted pathway (which played out) and a possible reversal point (just as the previous reversals upon reaching the upper limit of the trendline). Obviously, not all stocks looked topped. Some are still hanging near the low end of their valuation. On the one hand, th...

I was going to post an article Sunday night about how, it seemed to me, that stocks entered the overbought territory. Fatigue got the better of me, but two days later, the market is on a decline. To what extent is the selloff related to extended (short-term) valuations? That's hard to say. On Monday the Fed Whisperer (Nick Timiraus of the WSJ) Tweeted (naturally) that, essentially, the Fed isn't in as benevolent mood as it may seem -- i.e., the Fed will still send the economy into a recession if it deems fit. It's worth noting that the Fed's record of predicting its own behavior is less than pristine. Looking at the SPY charts for 2019-2021, we see that prices dropped in early December and rebounded in mid-December. That being the case, it seems to me that we may still have a "Holiday Rally." I haven't posted much lately because I don't see any good buys I want -- not for the Model Portfolio. However, ABNB is moving into good value territory. ABNB tra...

Happy December everyone! Hope you've having a good first day. SNOW rebounded from $126 and closed at $154.34; this means the SNOW position is up 18.4%. GOOGL traded sideways today (it technically gained 0.01%). CRWD gained 5.47% CB fell 0.58% The SPX technical chart hit a trend line I've been watching. I'm not saying SPX will come crashing down (no one can know that). But I am watching SPX more vigilantly now. This website is created and authored by Marlin Sandlin and is published and provided for informational and entertainment purposes only and merely cites my own personal opinions.  I am not a financial advisor, and this website is not intended to constitute investment advice or provide specific advice or recommendations for any individual or on any specific security or investment product.  Any action you take upon the information you find on this website is strictly at your own risk.  This website may share links to articles and information which is interesting to me,...