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Frequently Asked Questions

What are your thoughts on Square (SQ)?

Jun 15, 2017

Of the two widely-regarded tech companies that Jack Dorsey has helped create – Square (SQ) and Twitter (TWTR) – I’d put my money on the former. The mobile payments company is a standout in one of my favorite NexGen trends, and this week Apple (AAPL) announced plans to take on SQ and its peers in the mobile payment game. I have to believe Apple will eventually be successful, but I also believe there will be multiple winners with SQ being one of them. However, I wouldn’t be a buyer just yet. The stock is up a lot recently, so I’d recommend waiting for a pullback before establishing a position. Continue Reading…

What are your thoughts on next-gen cryptocurrency? Any way to trade it?

Jun 13, 2017

This is a question I have received many times in the last month – including three in the last week! – as the price of Bitcoin has skyrocketed. There are a few ways to play the movements in Bitcoin, but none of them are perfect and are simply “tracking” types of securities that have issues of their own. The pure-play way to trade it is buying the coins themselves, but I readily admit I’m not an expert in how that works. I do believe that cryptocurrencies are real and that they have a place in the future, so I’ll continue to watch for NexGen opportunities to profit from them. For now, the overexposure Bitcoin has made me wary in the near term and it needs to come back down to earth before it becomes an attractive buy. Continue Reading…

Volume inevitably gets lighter in the summer, how does this impact your trading strategy?

Jun 11, 2017

You’re absolutely right that volume historically slows down during the summer months as Wall Street heads out on vacation, but it doesn’t change my trading strategy. What does change is the daily volatility in individual stocks because the lighter overall volume allows for a larger trading range. That creates chances for us to buy into patches of weakness and sell into rallies that may only last a few hours. Just look at last year – had you taken a three-month vacation from investing, you would have missed out on two great buying opportunities. That’s why I love the summer months for trading and am excited about what’s ahead for us! Continue Reading…

How do you identify these next-gen trends?

Jun 07, 2017

I get asked that question quite a bit, and it’s a good one. People are often surprised that Wall Street is missing out on a lot of these opportunities, as they should be.

There are a variety of ways I spot the strongest trends, from stock screens to money flow to charts to research reports and more. But it may surprise you to learn that a lot of really good investment ideas also come to me in my everyday life. I’m always alert, always watching what’s going on around me. Oftentimes, it’s these very themes. This is how the smaller yet powerful trends that Wall Street is missing out on make it onto my radar.

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I recently read a statistic that 50% of stocks were sitting below their 50-day moving averages. So what?

May 28, 2017

You’re definitely not along in wondering that, so let’s talk about it. The more names trading above the 50-day indicator is a sign of a healthy market, since more stocks are higher than their average price. However, if the number gets too high it could be considered a sign of an overextended market. Similarly, if the number below the moving average is abnormally low, it can be a sign of a potential bottom.

The 50/50 split you mentioned tells me two things. The first is that the market is nowhere near a top because the number of stocks would be closer to the 80% level we saw at last year’s peak if it were. The second is that with half of the stocks considered healthy and half considered unhealthy, we are truly in a stock picker’s market.

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I’m a fan of marijuana stocks – what is your take on them? – Tina N.

May 25, 2017

You’re smart to have your eye on this industry! When it comes to next-gen trends, the marijuana/cannabis sector fits the bill perfectly as it is a high-growth group with diverse potential. Over half the states in America have already approved medical marijuana use and several more allow recreational use. Plus, the probability of it being legalized on the federal level increases each year.

I definitely see opportunities in U.S. marijuana stocks and firmly believe the sector will be a strong driver of Wall Street in the future. In the meantime, I also have my eye on cannabis-related biotech names that are already making an impact today and will only continue to do so in the years ahead.

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I’m looking for dividends and growth, what stocks do you recommend?

May 05, 2017

NexGen investing is all about forward thinking. We’re looking for stocks that may not be the big winners today but will be in the coming years. These are companies near the beginning of their life cycles, and they’re looking to change the way we do things. Therefore, the majority of the stocks I recommend will be growth stocks. They’ll likely be smaller than the kinds of growth stocks Wall Street is pushing today, but they’ll still hold the same (if not more) potential for the future. And I expect them to grow exponentially over the long term.

Dividends won’t be a main focus of ours since many NexGen companies are smaller in both size and life span so the majority either won’t pay a dividend or will have a very small one. That said, there will always be exceptions, and there are two companies I like right now that pay decent dividends.

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Do you ever take the media into consideration when analyzing stocks? Seems there’s always a news story that influences the market.

Apr 28, 2017

This is a great question because many individual investors don’t stop to think about just how much the financial media noise can guide their perspective on the market. There always seems to be a plethora of headlines to shake up Wall Street’s views and day-to-day performance. While there are exceptions to the rule, in my experience I’ve found that it’s best to ignore the extraneous noise that ultimately has no direct effect on the stocks we’re invested in. Many of these headlines or shouting pundits are just short-term blips.

It’s all about relying on the charts. The charts (not the talking heads on TV) will always tell the full story behind market move, and that’s why technical analysis is such an effective strategy. It also helps us use media hype to our advantage.

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Sometimes you have one idea in mind for a chart pattern but the market has another. What do you do when the chart doesn’t do what you expect?

Apr 27, 2017

You’ll hear me say this a lot: technical analysis is not a black and white science. Instead, it's more like art and it tends to have a grayish tone. I use charts to look at a stock's past trends and patterns, which help me determine the most probable outcome. Combine that with a full fundamental review and the odds of picking a winning stock is greatly increased.

But as you say, the charts don’t always behave exactly as we’d like. The timing of an uptrend can be somewhat unpredictable, which is why patience is sometimes required to allow the pattern to play out. And if it doesn’t, I have strategies in place to keep our losses (an inevitable part of investing) in check so that we still come out on top.

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How does volume figure into your chart reading?

Apr 26, 2017

Volume is one of the most important metrics to keep an eye on. Watching how much money is flowing into and out of a stock, as well as at which prices, tells you a lot about its outlook. A downward move may spark concern, but if there was little volume sending it lower the panic may be premature. Likewise, if I see volume spike as money flows in, it signals something is going on that I need to dig into.

Volume is an excellent tool to decipher any chart with, and you’ll see me reference it often in my trading recommendations.

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