Our Most Profitable System Is Telling Us To Buy
In January I warned StreetAuthority’s premium newsletter subscribers against overreacting. The markets were in a tailspin, officially crossing into correction territory just two weeks into the year.
However, I also said in a follow-up that it would be prudent to begin making a shopping list.
#-ad_banner-#Today, we find ourselves in a market that has shown some signs of strength. Oil prices have rallied about 31% since mid-February, propelling the Dow Jones Industrial Average on a 1366-point rally. The S&P 500, meanwhile, is up roughly 8.8% since then.
Aside from firming oil prices, there are other developments I’ve seen that lead me to believe that the rampant selling is beginning to abate.
Back on January 15 (the very same day I warned readers to not overreact to the market by panic), my colleague Jimmy Butts noticed that his Maximum Profit system was throwing up some major warning flags.
(I’ve covered how Jimmy and his readers use the Maximum Profit system to identify fundamentally-sound stocks with momentum to deliver quick gains. I won’t recap the mechanics of the entire system today. But for more, read this or this.)
When he checked the system that week, things weren’t looking good. It wasn’t the first time the markets were in turmoil, of course. But normally during times of distress, the system usually recommended a “hold tight” approach. This time around, not only did the Maximum Profit algorithms not flag any new buys — they also issued a “sell” signal on a total of five different stocks, which was virtually unprecedented in the system’s existence.
On the bright side, this allowed Jimmy and his readers to sidestep much of the downturn we saw this year. In fact, at one point, Jimmy’s main portfolio was 80% in cash.
Fast-forward to last week, and Jimmy’s system flagged seven new buys across all the Maximum Profit portfolios. Based on my experience with the system, I see this as a major sign that it may be time to start dipping your toe back into the market.
Jimmy agrees. He believes right now is a great time to be a momentum investor:
| The great thing about being a systematic investor is — as long as you adhere to your rules — you don’t have to hang on for the long haul during a major correction and hope that things get better. I’m talking about folks who likely suffered major drawdowns during the financial crisis and finally couldn’t handle it anymore only to sell at or near the bottom. As momentum investors we won’t necessarily miss out on all the pain, but we will be out much quicker than most. And more important, as momentum investors we have the unique ability to possibly turn a profit when everyone else is treading water. In order to generate above-average returns we will need to find what’s working in the market… and cut what’s not out of our portfolios. And that’s exactly what my Maximum Profit system does. |
As I mentioned earlier, Jimmy’s system has turned up a slew of new buys. And from the time it tagged those stocks until now, every single one is in the black. In fact, a few already up double-digits.
For instance, one of his recent picks is an under-the-radar company that you’ve probably never heard of.
The company is one of the nation’s largest manufacturers of steel wire reinforcing products for concrete construction. So the concrete barriers on the side of a road, the building where you go to work, the tunnel or bridge you pass through, even the stadium at your favorite sporting event more than likely uses this company’s products during construction… it makes the structural pieces holding everything around you together.
Since his system tagged this company in January, the stock has soared more than 14% in a little over a month.
The incredible thing is this stock is only getting started, so it’s not too late for investors to get in. And what’s more, there are a handful of other stocks just like this one that Jimmy’s system has tagged. If you’re interested in getting access Jimmy’s latest picks, then I encourage you to give Maximum Profit a try. When you sign up for a one-year subscription, you’ll not only receive all of his latest picks, but you’ll also get a free copy of The Maximum Profit Advisor’s Guide, which goes into more detail about how the system works and how you can use it to help you begin making money today. Learn more here.