Hey it’s Sasha Evdakov and welcome to Tradersfly.com where I share with you some insight about trading, investing and the stock market.
In order to wrap up the 2015 year, one of the things that I’d like to share with you is just seven key lessons that you can learn from this year about individual companies. Just basically about trading, about the charts and personal lessons that you can learn from by watching how the stocks act and behave.
What we’re going to go over in this week’s lesson is just 7 key lessons to learn from individual companies that traded in 2015.
I chose these stocks and companies in order to really pass on a message or to teach a lesson. It’s not that they were always the best moving companies, and it’s not that they were always the high flyers or the most popular companies. It’s really there to guide you and teach you a lesson about trading, investing or the stock market.
The first stock on my list, and we’ll just go alphabetical is Amazon. Amazon was probably the stock that I traded the most this year, and Amazon had a really fantastic run.
When you look at amazon, one of the key things to remember in 2015 is that patterns typically repeat. And you don’t know how high that stock can go, or how far it will run.
Just because it’s a little extended, or just because it’s continuing to run up higher, sometimes waiting for he pull back, isn’t always the best option.
Sometimes the better approach is just to get in very lightly and allow those little bit of shares to continue moving higher and then on a pull back, when you see a small pull back, that’s when you can add to that position. And at least that way you have a small position already that you accumulated.
From 2015 this stock really ran up from $350 a share to about $650 a share. I don’t personally trade during earnings. I typically sell most of my shares before the earnings come out, for those of you that have been with me and know the way that I trade.
And even though, if you miss those earning parts or miss those earning sessions from those little pops that you get during earnings on amazon, you still would’ve captured a tremendous run.
Learn that patterns typically repeat, and just because that stock is a little bit higher or moving really fast, if you’re worried but you still see the potential, get in very lightly and then see how those share perform and then of course you can always add a little bit more later in the future, as long as that stock proves to you that it’s moving well.
Stock number two on my list is BAMM, and this stock is more so a penny stock and one thing to learn from this year in penny stocks is that cheaper companies or penny stocks, typically have short lived runs.
If you’re trading penny stocks, there’s nothing wrong with that, it’s just a personality thing, it’s about trading what you’re good at, or what you like to trade, what fits for your risk tolerance.
But in terms of penny stocks, you have to remember that typically those runs are short lived, or small time lived.
Usually when you get that little pop in that penny stock or a cheaper company, then you need to be taking some profits fairly quickly or at least take some profits and allow the rest to run, because you never know when those stocks can pull back.
This company had a little bit of a run up from the mid-$2 range to about the $3 and $20 range. That’s not a huge run, but when you compare it to where it was, around that $25 range or $40 range, many years ago, these cheaper companies or low dollar companies are hard for them to get past certain levels, that’s because the overhead supply and all the other people trying to short them, there’s just so many of them, so it just makes it so much difficult to get pass a certain point.
Always be mindful that these cheaper companies typically will go back to their initial break out points. Even if you take a look at one of the most powerful penny stocks of the year, such as the 1-800 flowers, you can see that this stock broke out to the upside and had some power.
It was a little bit more of a popular company, and had some decent liquidity, but even then this one had a slight pull back, so always be mindful if you’re trading penny stocks, you definitely want to be in and out much quicker that if you’re probably swing trading.
And it just really depends on your trading style, trading system. But in general these stocks are short lived, and they’re shorter time frame in terms of the trade or holding on to a certain time frame. You’re holding them for a shorter period of time.
Coke is the next stock on my list. So what can you learn from when it comes to coke from the year 2015?
With coke it’s not one of those hot or sexy stocks that some people would refer to, like a Go Pro, a Facebook, an Apple, it’s not one of those supper attractive companies, however, the profits that were made in 2015 were very attractive.
This stock had a nice break out from that $95 range in 2015 to right around that $200 range, so if you held on to that company, you basically would’ve doubled your money in 2015.
Just because the stock is a little bit older, or maybe it doesn’t trade options, or maybe it’s not as attractive, that doesn’t mean the returns or the profit potentials or the run is not going to be attractive.
Always watch how things are building, how things are moving in that stock or in that company and then go into it if it’s moving and acting well.
Just because it’s more of an established company or one that you’ve heard about in the past, doesn’t mean it can´t have a super fantastic run for you in the future.
GoPro is the next stock on my list for 2015, and something that you can learn from. Technically this stock is a hot or sexy company or at least it was and it was talked about quite heavily, and that’s because they have a really attractive product, their product is really cool, really neat, very fascinating, it’s a technology company, so there’s a lot of buzz that goes on with go pro and there’s also a lot of news that go on with GoPro.
With GoPro what you can learn from in 2015 is that just because a company is hot or attractive, that doesn’t mean the returns are going to be favorable.
If you compare it to the last stock that we discussed, coke, even though that company is a little bit more milder, maybe not as attractive to own in our portfolio, the returns were phenomenal, but Go Pro, having Go Pro in your portfolio from 2015 all the way to now in December of 2015, you would’ve lost a hand full of dollars. So basically that stock went from $90-95 to now around that $27 range.
If you were screaming at the IPO wanting to purchase Go Pro now it gives you an opportunity just like Alibaba, a lot of people were screaming to get into those stocks and companies and there was a lot of buzz going on and happening.
But now the prices are basically having a major cut, so it allows you to get into those stocks if you really wanted to.
I personally wouldn’t recommend it as far as in December of 2015, right now if you’re watching this video as soon as it’s released.
Instead what you want to do is wait for a basing pattern and see those stocks moving higher and higher, creating higher highs and higher lows. So instead just be patient.
What can you learn from go pro? It’s just don’t get soaked into those hot stocks or stocks that are really talked about in order to have a great portfolio.
You can trade other companies, companies maybe not as attractive to have in your portfolio, and they’ll still give you a fantastic run like coke.
Instead of always asking yourself or thinking about how attractive a certain company is, instead look at how attractive is it to your portfolio.
And that really makes a lot more sense and hopefully you learned that lesson with go pro in 2015.
Starbucks is the next company that you can learn from, and Starbucks is one of those low and steady companies.
What is it that you can learn from this company in 2015?
Sometimes low and steady can help you win the race. If you remember the book the tortoise and the hare, the same concept and principle applies.
This stock was once $6 and that’s of course split adjusted, but now it’s right around that $60 to $70 range.
The stock doesn’t move a lot on a day by day basis. That’s also known as volatility, it’s not a volatile. And also that beta weighted average or the beta for that stock, the movement of it is also a lot smaller.
It is slower and if you’re attracted to the Amazons, the Googles that are fast moving and you’re constantly getting burned. Sometimes getting a stock that’s maybe a little bit more slow and steady can be a lot better for your portfolio.
If you got in on this stock in 2015 or even a lot sooner, just allowed it to continue to run, you would’ve had a nice, healthy profit and a good increase to your portfolio.
Keep in mind that sometimes slow and steady can win the race and specially if you’re choosing the right companies at the right time and giving it time to run the race it’ll do a lot of great goodness for your portfolio.
Whole foods is number six on my list. And what can you learn from Whole foods? Well, just because it's premium on the inside or you like to shop there, or whatever it is that makes it looks attractive, similar to go pro, that doesn’t mean the investment is going to pay out.
With whole foods that stock reached a premium price on 2015 right around that $55 range.
Currently it’s trading right around the $30 range, so just because it looks good, it appears nice on the inside, that doesn’t mean the investment is going to pay out, because the investment is really all about growth, and if the company doesn’t have great growth, then of course it’s not going to pay out or the stock price for that matter.
In whole foods, one thing that really disturbs me is all the different types of food that gets thrown away, because they have to showcase a really premium based model, there’s a lot of food that gets thrown away.
Whole foods is not the only food store that throws away a lot of food between Wal-Mart, between the super targets, all the other grocery store chains, they all throw out quite a hand full of food.
Unfortunately, in America over 96 or 95 billion pounds of food ends up in the land fields, and there’s a movie about it called Dive, which you can go ahead and take a look at and see, there really talks about this subject in depth.
You have to remember that in order for a grocery store or a chain to showcase really high grade or high quality products, they do have to dispose or get rid of a lot of other foods.
Even though it may look good on the inside, it doesn’t mean it’s going to pen out really well for your investment. And just throwing out food is just one of those things that I really don’t like, because there’s a lot of people that are hungry out there and if you can contribute, go ahead and contribute in those ways.
The final company to learn from in 2015 is Exxon Mobil. I’m going to tie in Marathon Oil into this as well, as well as some other Oil companies.
It’s really this whole sector that you can learn from. Even though they are a big, major sector, that doesn’t mean they can’t have major pull backs, and it can really hurt your portfolio. Especially if you’re in retirement and you’re investing in these large companies who’re typically stable, even though they’re making their billions, still with a huge cut, that doesn’t mean they can’t pull back.
It’s not like they’re losing money right now, they lost some money in the sense of they’re just not making as much and their company valuation is not a high.
But it doesn’t mean they aren’t worth millions, it doesn’t mean they’re not still profitable, it simply means their stock price is a little bit lower.
The thing to keep I mind is you, as a retail trader or a retail investor, if you’re investing in these types of companies, which you think are stable, even like a Coca-Cola or P&G, Procter & Gamble, even if you think they’re stable, that doesn’t mean they can’t pull back. Be mindful and always take some profits into strength.
Let’s say you had a retirement fund of $100,000 and you were simply at $200,000 now in profits, let’s say you only invested in oil stocks, and you have that extra $100,000. Now because you’re profitable, you should sell, let’s say, half of that investment and maybe put it into something else.
That way you’re capturing the run and you’re taking some profits into strength, and letting the rest ride.
Just because they are big, just because they are known to be stable and you think they’re going to continue to appreciate, even these large major sectors or companies, sometimes do get some major pull backs, so always be mindful and always take profits into strength.