Q: What is your track record?
A: I’m proud of my personal trading history and used to publish it. And without a doubt, I would get more subscribers if I promoted my results. But experience taught me performance chasing subscribers are the worst kind of subscribers. These people don’t understand how the market works, and even worse, they are lazy and don’t even care about learning how the market works. They insist on being spoon-fed trades and are the first to complain when something doesn’t work out. While I would absolutely love it if every trade was a homerun, unfortunately, the stock market doesn’t work that way. I grew tired of trying to explain that to the people who picked my service just because of how good last year’s performance looked. Fortunately, all of those hassles went away as soon as I stopped promoting performance and started focusing on attracting subscribers who value the substance and quality of my analysis.
Q: How consistent are your results?
A: Trading is hard and even when done successfully, performance is irregular and lumpy. Trading profits often follow the Pareto principle (a.k.a. the 80/20 rule). Typically, 80% of our year-end profits come from just 20% of our trades. These infrequent home runs are the windfalls that make an entire year. Outside of those big winners, most of our other trades end up doing a lot of nothing and I’m happy when the small wins offset the small losses. The key to successful trading over the long-term is not getting discouraged during those lulls between the big winners.
Q: How reliable is your analysis?
A: My analysis has been quoted and shared in major newspapers, popular financial portals, and on TV. In addition, a lot of big-name personalities in this business appreciate my insights and read my analysis regularly. That said, I’ve never been the type to name-drop in order to impress people. I intentionally don’t maintain a “seen on” section on this website because what I said last year, last month, or even last week doesn’t matter anymore. My goal is to impress people with the quality of my content today, not how many times journalism majors quoted me in the past. And to be honest, after getting to know many of the big names in this industry, just because someone is on TV doesn’t mean they are good at trading. Don’t follow me because someone told you to, follow me because you find my content useful. I offer a dirt cheap trial so you can judge the quality of my Premium Analysis for yourself. Don’t worry about what other people think. Make that decision yourself.
Q: Why is your website so basic?
A: I keep it this way on purpose. First, I’m a no-nonsense, get straight to the point kind of guy. Flashy graphics, headshots, testimonials, “seen on” sections, flashing banners, and all of that other clutter is ugly and only gets in the way of the real star of the show, the content. Second, a good looking website doesn’t improve the quality of the analysis. In fact, most of the gurus that put a lot of money and effort into trying to impress you with a flashy website are actually compensating for a lack of meaningful content. If you want a slick website, look somewhere else. If world-class stock market analysis is your number one priority, you found the right place. And third, I maintain this website myself. I’m a trader, not a graphic designer or web developer. I don’t spend money on things that don’t improve the core service and my far lower expense footprint allows me to offer an elite level subscription at a far more affordable price than most of the other services out there.
Q: A lot of academics claim the markets are efficient and cannot be beaten. How do you respond to that?
A: If you read any of the countless books written by these academics, you will quickly realize most of them tried to beat the market, failed, and then soothed their bruised ego by inventing the theory it is impossible to beat the market. That line of reasoning is total garbage. Just because they couldn’t do it doesn’t mean it cannot be done. While I cannot backflip a bicycle, I’ve seen other people do it. What I cannot do is nothing more than a personal limitation and has no bearing on what other people can and cannot do. Without a doubt, trading successfully is challenging and requires a lot of training, experience, and the right tools, but it is definitely possible.
Q: How come you are not a professional money manager?
A: I enjoy working from home and spending extra time with my family. Being a professional money manager is far more than just trading. It means commuting to an office, wearing a suit, managing employees, processing mountains of paperwork, subjecting myself to SEC audits, and spending the bulk of my time and energy soliciting new investors. I started trading because I wanted to escape those “job-like” obligations. I love trading and keeping this an educational service allows me to focus on the markets, not running a high-pressure investment fund.
Q: You keep saying the same thing over and over again in your analysis, what’s the point?
A: The market’s mood can stay the same for months, even years. That means what was working before is still working now. Sometimes this leads to repetitive analysis, but I’m not going to change my outlook just because my analysis becomes a little boring. And to be honest, these things often require repeating because it serves as a necessary reminder that nothing has changed. All too often, people start questioning the sustainability of a trend far too early and give up on it long before they should. Saying everything is still the same and we need to stick with what is working is just as critical as identifying key turning points. Giving up on a trend too early is extremely expensive and even worse, betting against it too soon can be fatal. I don’t mind repeating myself if it means I’m still making money.
Q: You said one thing last week but this week you are saying something totally different. Why should I believe you now?
A: I don’t care about being right or wrong, I’m in this for only one reason and that is to make money. I’m human and make mistakes. But in a very unhuman way, I’m quick to acknowledge those mistakes and change my views, especially when money is involved. But sometimes it doesn’t even take being wrong to necessitate a change in outlook. Recent developments in the news or the market’s price action often dictates an adjustment to our trading strategy. Unexpected headlines can upend the market and render all prior analysis obsolete. And sometimes, simply moving from the lower-end of a trading range to the upper-end turns a buying opportunity into a selling one. I follow the market every day because we never know when the next opportunity is going to present itself. And when it happens, that often means changing from what we were doing last week.
Q: Three weeks ago you said the market was going up, but now the market is down, what gives?
A: Everything always comes down to timeframe. We buy at an exact moment in time and we sell at an exact moment in time. What happens before, during, or after our trade doesn’t matter. If my timeframe is different than yours, what looks wrong to you doesn’t apply to me because I sold earlier or am holding longer than you are. You cannot judge right or wrong unless you also take into account the time frame. That said, maybe three weeks was my timeframe and it turns out I was wrong. It happens. In fact, it happens a lot when trading. But as long as we respond to our mistakes intelligently and stick to our trading plan, being wrong isn’t a big deal. We take a small loss and move on to the next opportunity.
Q: What do you trade and how many positions do you hold?
A: My market exposure is split into three categories for risk management and diversification purposes.
Combining all three strategies means when one approach is struggling, the others can come to the rescue. Obviously, buy-and-hold investments do poorly in sideways markets, but that is when swing-trading really shines. And vice-versa. Buy-and-hold is the best approach in strong uptrends because swing-trading invariably sells too early. Diversifying our portfolio across strategies means no matter what the market is doing, we have the ability to profit from it. And best of all, my Premium Analysis subscription covers all three trading strategies.
Q: How often do you trade?
A: Obviously, it varies based on market conditions, but a few trades a month is typical. When I’m wrong, I typically bailout within a few days for a small loss. When I’m right, I often hold for several weeks in order to get the most out of a move before harvesting profits. In addition, I avoid flat periods entirely in my trading account because I only want to hold headline risk when I’m getting paid for it (i.e. the trade is moving in my direction). For this reason, I frequently spend weeks out of the market when there isn’t anything worthwhile. Making money in the market is easy, the hard part is keeping it. That means not giving away our hard-earned profits by making stupid trades just because we feel compelled to always be trading.
Q: Do you use stop-losses?
A: Stop-losses are not just for rookies. No matter how experienced we are, mistakes and bad luck happens to everyone. All traders need a reliable backstop to protect themselves when things inevitably go wrong. As the saying goes, “the first loss is the best loss.” Stop-losses help us get out in a timely fashion and make sure we are in the best position possible when the next trading opportunity presents itself.
Q: Why don’t you do more with options?
A: Options are useful in certain situations, but often, getting the direction right is challenging enough. To trade options successfully, you also need:
Miscalculate one of these factors and a great trading idea produces disappointing results. There are many ways to profit from options, but for swing-trading, personally, I find it a lot simpler to stick with the underlying and only worry about up or down.
Q: I have $$$$$ in my retirement account, how should I invest it?
A: Regulations prohibit me from giving individualized investment advice. This service exists under the newsletter exemption in the SEC rules. That means all analysis must be general in nature and not tailored to any specific individual. I am free to discuss the market, but if you have specific questions about your personal investment situation, seek the guidance of a licensed financial advisor who will get to know you, your situation, your goals, and your risk tolerance before making any investment recommendations.
Q: How long have you been doing this?
A: I’ve been trading for nearly three decades and doing this full-time since 2008. I started the free Cracked.Market blog in 2012 and have been offering a premium subscription since 2013.
Q: Why do you blog?
A: It all started on an investing forum. I found engaging other users helped me be more thoughtful, rational, and deliberate with my analysis and trading decisions. Putting my best ideas out there for all to see (and criticize) held me accountable and helped mitigate the emotion that always tries to sneak into our trading. This blog grew from wanting to share these thoughts and ideas with a larger audience. And it really is true, the best way to learn something is to teach it to someone else. I get as much out of this experience as my loyal readers. I will always be grateful for everyone’s support, encouragement, and friendship and this blog is my way of returning the favor.
Q: If you are a successful investor, why do you charge a subscription fee?
A: I enjoy supporting the trading community that has already given me so much. That is why a big portion of my content is available for free. But for traders that want more actionable content, I believe it is reasonable to charge a modest fee to people profiting off my ideas. I use the subscription revenue to cover the website’s overhead and related expenses, making it possible to continue doing this for both free users and premium subscribers.
Q: Why shouldn’t I simply follow the guy with the best performance last year?
A: Many retail investors underperform the market because they chase what was hot last year. If there is one guarantee in the market, it is that next year’s performance will be different. Some traders will do better. Some will do worse. But outside of a statistical fluke, no one will do exactly the same.
If a person believes in reversion to the mean (and I do), then a hot investor will invariably cool down and a cool investor will eventually warm up. Unfortunately, most retail customers are too impatient and bail on the cool guy who is on the verge of warming up and give all of their money to the hot guy who is about to cool down. It doesn’t take a math degree to realize abandoning someone who is about to get hot, only to jump aboard someone else on the verge of cooling down doesn’t produce worthwhile results. The key is finding something that works and sticking with it through the hot and cold.
Q: If chasing performance doesn’t work, what is the best way to pick a trading strategy?
A: Find a mentor who has a similar view on the market as you do. No matter how impressive the mentor’s track record, if you are a square peg (value), don’t try to fit in a round hole (momentum). Compatibility and consistency are the keys to long-term success. Some years the performance will be great. Other years it won’t. But it averages out over the long-term when you stay true to your strategy.
Q: I sent you an email 45-seconds ago, why haven’t you responded yet?
A: We live in the age of instant gratification and are accustomed to getting what we want as soon as we want it. While a lot of businesses cater to this must-have-it-now mindset, unfortunately, this is not one of them. I started trading to escape the always on-call culture the world is moving to. I became my own boss so I could set my own schedule and to me, that means not reading email over the weekend and sometimes not even during workdays when my attention is focused on other tasks. If you send an email, please allow two business days for a response. Thank you for your understanding.
Q: Why are you so obviously biased against my favorite politician and political party?
A: Believe it or not, I get accused of this from both sides because I don’t subscribe to anyone’s talking points or ideology. I call it like it is and often that means being critical of the people in power. The truth is, all politicians are liars, cheats, and hypocrites, even your favorite ones. The stock market is not a Republican or Democrat and when I’m trading, neither am I. I’m in this to make money and hopefully, that is your primary goal too. If you are overly sensitive about your political views, this probably isn’t the right place for you. Be warned, I am an equal opportunity critic, especially when it comes to all the stupid things our politicians do.
Q: I stopped trading, can I get a refund for the unused portion of my annual/quarterly subscription?
A: Quarterly and annual subscriptions are discounted in order to reward people for making longer commitments. For this reason, prorated refunds are not given for early cancellations. If you are unable to commit to the market for a longer period of time, consider starting with a monthly subscription. You can always upgrade to the quarterly or annual plan later. (Note: Annual subscribers are eligible for a full refund if they cancel within the first 30 days of service.)
Q: Why don’t you have a comment section?
A: I used to maintain a comment section and encouraged participation. I loved hearing from readers, especially their thoughtful and valid criticisms. But as is usually the case on the internet, a few bad apples tried their hardest to ruin it for everyone. And unfortunately, the bad apples won. Over time, I grew tired of dealing with all the spam and juvenile trolls. Cleaning up the comments section was my least favorite part of running this blog and I reached my breaking point. I am sorry thoughtful and sincere readers no longer have a place to post comments, but I enjoy this so much more now that I am no longer forced to deal with the trolls and spam. If you want to share your thoughts and comments, feel free to contact me directly.
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