As always, be sure to read my disclosures / disclaimers below. Most notably, I do not encourage or recommend for anyone to follow my lead on any stocks listed here or otherwise, since I may enter, exit, or reverse a position at any time without notice, regardless of the facts or perceived implications of this article. Cheers.
To get the best results, I highly recommend reading this entire post and checking out all of my educational materials. However, if you want to the quickest/easiest guides on how to follow my method, simply check out the following:
The Money Mark App ! (only on iOS for now) https://apps.apple.com/us/app/moneymark-official/id6444786044
“The EASIEST Way To Get Rich With Me” on YouTube
“Money Mark University” playlist on YouTube
“Follow The Money (The EZ Method)” on YouTube
My “Easy Money Portfolio” spreadsheet
My Complete List Of Current / Historical Picks (the “1% Portfolio”)
I’ve also been working on a document that provides easy reference to all of my personal investing rules. It’s not complete, but you can see the draft-in-progress by clicking this link.
Some books you can read to learn about investing by clicking this link.
Last, but not least, for those looking to learn how to build an operating model (my cheat code to finding great stocks) here are a few links:
A Retired Wall Street Insider
Over time, it’s easy to make money on stocks. All you have to do is buy and hold.
As a result, when the stock market is rising, it’s easy for anyone to think, claim, or pretend to be a great stock picker. However, when the market drops, you start to realize that almost nobody has professional training and skills.
You see, a STOCK is literally a piece of a COMPANY… and every company has a value that you can estimate, IF you have the required training.
It’s not just about math. In fact, math is the simplest part, but STILL takes years to master. I won’t bore you with the details. Just know this — whatever you’re an expert at doing, imagine me telling you that I know more about it without any education, training, or experience.
Pretty insulting, right?
But forget about insults. This sort of overconfidence often leads to a loss of their hard-earned money… and yours, if you’re listening to them.
I was lucky enough to become a professional stock analyst. I retired young and have spent the last 10+ years helping people online… FOR FREE.
You can read all about my background & qualifications here — http://pipelinedatallc.com/
How To Follow & Profit From My Picks
Over the past 25+ years, I’ve averaged a profit of ~40% per year on the money I’ve invested. To put that in perspective, that level of performance turns $10,000 into over $1 MILLION in 14 years… and keeps doubling every two years after that (on a pre-tax basis).
To help others follow in my path, I developed a method that enables anyone to invest in my picks (including the right time to buy and sell) without my personal assistance.
Subscribing to this blog and my YouTube channel is obviously the first step.
After that, following me on StockTwits (instructions below) will give you free updates on my activities in real time.
WHY DO I DO THIS FOR FREE? It’s simple…
I have thousands of friends, family members, and followers who ask for personal advice and stock picks. For many reasons (including time… and LAWS), I can’t do that. So, if you want to do this, YOU will have to learn the lessons and follow them.
It’s important to note that I follow a similar, but much more complex method. Just know that the one I discuss here was designed such that MOST people can learn and profit from it. At first, it might seem daunting, but trust me, it’s easy (especially compared to the impact it can have on your future).
As mentioned above, I have literally thousands of people doing it.
OK, let’s get started…
1. For those of you who are just starting to follow my work, PLEASE focus on the educational pieces first (click here for that YouTube playlist). They will enable you to make a LOT MORE MONEY on my picks!!!
April 22, 2021 Update: On April 15, I went live on Facebook to answer Q&A about stock investing for friends and family. As it turned out, a LOT of people didn’t truly understand what a stock is… or cryptocurrency… or why inflation is a necessary driver of economic growth… or why all of that is important to understand!! As a result, the live turned into a 2 1/2 hour master class on the world of finance. Anyone look to learn more about the world of finance is encouraged to check it out. You can access it here.
2. After step 1 above, you’ll be better equipped to follow and take advantage of my personal tracking sheet (which identifies the stocks I’m most interested in). Between 2018 and 2021, those picks generated an annualized return of over 100%. This has made it easy to win.
Just know that you’re liable to lose money on these picks if you don’t watch my videos first. The reason is simple. I pick stocks when I think the time is right to buy them. If you don’t buy it around the same time / price, you may be paying too much.
Also, I teach how to identify the good times to buy and sell, so you can figure it out… but I don’t give but / sell alerts. Those points are transparent if you follow my charts. Accordingly, I point them out and post them to my portfolio after the fact.
Learning the lessons is not required to do great, but good students definitely reap extra rewards.
3. When I permanently add or remove a stock, I immediately post the move in my StockTwits Feed. However, the lessons are your guide if you want to trade them (which is more lucrative than simply buying/selling when I add/delete them from my list).
Anyone who wants those add/delete alerts can click the StockTwits link, follow me (@MasterCap), and make sure the notifications settings (in the app and on your phone) are set properly to receive my posts in real time.
4. I’ve also created a quick presentation HERE to help you get started.
5. I’m not sure if I’ve covered the topic of HOW MUCH to put into each stock, so here’s a quick guide on what I tend to do.
First, I DON’T put too much into any one stock. Guessing which of my picks will perform the best is STUPID. Even after 25 years, I can’t even do that! Because of that, I spread my money out, fairly evenly, across each stock ASSUMING THEIR POSITION IN MY RISK/REWARD CHARTS ARE EQUALLY ATTRACTIVE. If you’ve watched my videos, you should know what that means. If not, watch them until it sinks in (it usually takes a little while, but eventually does!).
In a perfect world, I would find 10 great stocks at great prices TODAY and put 10% of my money in each of them. However, that’s not how it works. Different stocks are in different positions in their risk/reward range.
Here’s an example of how I work my portfolio…
Let’s assume I find 6 new stocks that are are all in the middle of their risk/reward range. Let’s also assume I put 10% of my money in each one. This is how a $10,000 portfolio will look:
- Stock A – $10,000
- Stock B – $10,000
- Stock C – $10,000
- Stock D – $10,000
- Stock E – $10,000
- Stock F – $10,000
- Cash – $40,000
- TOTAL VALUE – $100,000
Let say I check the charts once a week… and after 6 weeks, 3 have gone up 50% and 3 have gone down 25%. Here’s how my portfolio looks now:
- Stock A – $15,000
- Stock B – $15,000
- Stock C – $15,000
- Stock D – $8,000
- Stock E – $8,000
- Stock F – $8,000
- Cash – $40,000
- TOTAL VALUE – $109,000
If the stocks that have gone up are all near the top of their risk/reward range, it’s probably a good idea to take profits (LITERALLY… that means selling $5,000 — your profit! — of those stocks). Similarly, if the losing stocks are now near the low end of their risk/reward range, it’s probably a good idea to buy more to at least get the position size back up to their original level.
The sales will increase your cash balance by $15,000… while the purchases will cost you $6,000 ($2,000 in each stock). At that point, your portfolio will look like this:
- Stock A – $10,000
- Stock B – $10,000
- Stock C – $10,000
- Stock D – $10,000
- Stock E – $10,000
- Stock F – $10,000
- Cash – $49,000
- TOTAL VALUE – $109,000
What you’ve effectively done is reduce your exposure to the stocks that were high in their risk range (in other words, the ones that had more downside risk and less potential upside reward), while increasing your exposure to the stocks that were low in their risk range (in other words, the ones that had more potential upside reward and less downside risk).
Over time, I have found that this exercise results in better performance. This makes common sense because I sold some of the riskier names and bought more of the less-risky ones.
Just remember that THIS WILL NOT WORK with just any stock!!!
The stocks I pick are meticulously researched / chosen… and the charts are custom-made by me. Even though they often look like technical charts (if you don’t know what that is, don’t worry), they are NOT. It’s just a common coincidence that my risk/reward charts (which are fundamentally based) will appear similar or identical to technical ones.
FYI, I don’t provide real-time access to my risk/reward charts. Nor is that important, because I don’t change them often. However, I DO frequently share them in presentations. Links to those presentation can be found in the description of my YouTube videos (see the bottom of the pic below for an example).
All you have to do is take a screenshot of the charts so you have them handy and know what prices are best to sell some or buy more.
I know it seems like a lot, but as I said earlier, THOUSANDS of people are following and profiting from this method. I can’t tell or advice you to follow this method. That’s a choice YOU must make for yourself… but if you do, be sure to learn all the lessons before jumping in. After all, it’s YOUR money and FUTURE!
Bonus Lesson: Managing Market Risk / Reward
FYI, my personal tracking sheet also shows what mode I’m in: Green Light, Yellow Alert, Orange Alert, or Red Alert.
I use LONG-TERM charts (like the 40 year S&P 500 chart below) to gauge the overall risk / reward of the stock market (I also use them for my individual stock investments).
Anything near the top of the chart has proven to be a great time to take profits out of stocks and seek to make money elsewhere (long-term government bonds usually work great from those points).
Anything below the gray line has been a safe buying zone, with the exception of Red Alerts…
…and I’ve only been in Red Alert mode twice EVER (in late-1999 5-months before the Internet crash and in mid-2007, 5-months before the financial crisis).
Anything near the bottom white line represents a generational (near once in a lifetime) long-term opportunity.
I’ve saved (and made) a LOT of extra money over the past 25 years using this as a guide:
During a Green Alert – Unless otherwise noted, I’m in Green Light mode (owning stocks without fear).
During a Yellow Alert – Conceptually, I want to keep most of my favorite stocks, but get rid of the third I like the least. With that money, I want to buy something like RWM, which goes up when the market goes down (and vice versa). By doing this, I’ll be 50% “hedged” (hedged = protecting the stocks you like/own against a stock market drop).
Explained: if you have $3 of stock and sell a third, you now have $2 in stocks… and if you put that other $1 in RWM, you have protected/hedged half of the $2 you still have invested in stocks).
During an Orange Alert – Just before the COVID crisis, I issued my first-ever Orange Alert. I saw the crisis coming, but didn’t see it impacting the market quite as badly as the crashes of 2000 or 2008 (which proved correct).
Conceptually, for an Orange Alert, I want to sell 50% of my positions (the ones I like the least… keeping pretty much everything I “LOVE LOVE”). With that money, I want to buy something like RWM to protect those positions. In doing so, I’m FULLY hedged.
Explained: (if you have $3 of stock and sell half, you now have $1.50 in stocks… and if you put that other $1.50 in RWM, you have protected/hedged 100% of the $1.50 you still have invested in stocks).
During a Red Alert – I sell almost everything and bet AGAINST the market by being heavily invested in things like RWM (which, again, goes UP when the market goes DOWN)… but again, these instances are extremely rare. I’ve only been in Red Alert twice in my life (luckily, those two times were 2000-2002 and 2007-2009, which resulted in big profits).
How / When To Get Back In – When the market is dropping, I don’t want to try to call the bottom. Only God can do that. Instead, I make my best guess and START buying EARLY. The reason is simple — my guess has a 50/50 chance of being too optimistic or pessimistic. So, if I wait for the market to drop as much as I expect, I have a 50% chance of missing the bottom (and with it, the great opportunity to buy low).
So, I try to think of it as 5 stages: very early, early, on time, later, and much later. I want to buy a LITTLE “very early”. I want to buy a decent chunk “early”. I want to buy a LOT near the levels where I think the market will bottom, but I also want to keep a little in cash in case we go even lower, so I can buy later or much later.
Good Luck !
- My StockTwits Feed
- My YouTube Channel
- The Quick Investor’s Guide To SMSI
- MoviePass Projected To Burn $600M In 2018
- Lose 33% In 9 Months To Make 1,000% In 15?
- Buying SMSI — Today Is The Day I’ve Been Waiting For!
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Disclosures / Disclaimers: This is not a solicitation to buy, sell, or otherwise transact any stock or its derivatives. Nor should it be construed as an endorsement of any particular investment or opinion of the stock’s current or future price. To be clear, I do not encourage or recommend for anyone to follow my lead on this or any other stocks, since I may enter, exit, or reverse a position at any time without notice, regardless of the facts or perceived implications of this article.
I am not a financial advisor. Nor am I providing any recommendations, price targets, or opinions about valuation regarding the companies discussed herein. Any disclosures regarding my holdings are true as of the time this article is written, but subject change without notice. I frequently trade my positions, often on an intraday basis. Thus, it is possible that I might be buying and/or selling the securities mentioned herein and/or its derivative at any time, regardless of (and possibly contrary to) the content of this article.
I undertake no responsibility to update my disclosures and they may therefore be inaccurate thereafter. Likewise, any opinions are as of the date of publication, and are subject to change without notice and may not be updated. I believe that the sources of information I use are accurate but there can be no assurance that they are. All investments carry the risk of loss and the securities mentioned herein may entail a high level of risk. Investors considering an investment should perform their own research and consult with a qualified investment professional.
I wrote this article myself, and it expresses my own opinions. I am receiving no compensation for it, nor do I have a business relationship with any company whose stock is mentioned in this article. The information in this article is for informational purposes only and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
The primary purpose of this blog/forum is to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses.
33 thoughts on “How To Get Rich With Stocks Step 1: Follow A Real Pro”
Interesting you chose TAST. I too placed a bet on the success of BK by writing naked puts on QSR (Restaurant Brands). Local store checks with store managers and a few impossible whoppers for myself ;p have revealed that in these early stages local store traffic is up between 15-19%. One of the cashiers at a drive through indicated that they were selling more impossible whoppers than regular ones. According to the financials of QSR BK does about 2/3 the revenue. Posted here as QSR is another way to play impossible meat. Also, most people I know prefer impossible burgers to beyond meat.
Agree. I chose TAST because it’s more of a pure play (QSR has Hortons) and has more enterprise value leverage (due to being deeper in debt — which is positive for common shareholders when things go right).
Anybody have a EPS estimate for Q3 for SMSI — I am at 8.5 cents (adjusted)?
The Street estimate is $11.1M and $0.06
I think it’s going to be an easy beat. Seems that you feel the same.
Yes, but I do believe that “expectations” are a little higher than Analysts Estimates who have historically been light (and that is probably somewhat recognized by the market at this point). Let’s hope they have some good news on new wins across their products.
To me, that’s a silly game. If I see good progress, that’s all I need… and I’ve already seen it. Earnings will be fun, but not necessary for me to continue loving this company’s position.
LikeLiked by 1 person
Do you mean you have seen good progress in Q3 already – if so – that is great?
TAST is running today!
Yep thanks for that. Closed out the naked puts on QSR at small profit and picked up shares in TAST yesterday at $6.50. You’re right better pure play and if revenue/earnings beat the high debt load concerns of the market should be alleviated. Cheers mark.
LikeLiked by 1 person
Another quarter of great results tonight. Revenue of $11.8M (up 80.7% y/y) beat the street by $0.7M and GAAP EPS of $0.09 beat by $0.03. Not as “exciting” as the crazy Q2 blowout, but BIGGER NUMBERS than Q2. Check it out… https://www.smithmicro.com/2019/10/24/smith-micro-reports-third-quarter-2019-financial-results/
LikeLiked by 2 people
Guidance was solid in light of Q4 being a seasonally slow quarter and management called it intentionally conservative to be safe. All in all, very nice progress.
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Agreed and the trajectory for continued growth looks strong. I would have like Bill to have been a bit tighter on the family Iot product landscape. It was hard to tell from his tone and pace if he wasn’t sure or was playing device types close to the vest. I would look towards more differentiated offering versus what’s out there. The message about a single platform for managing all was a good start but adding additional functionality to new devices or a disruptive form factor approach would be a game changer with the singular platform. IMHO
Thanks Mark for sharing your latest investments.
Are you going to do a video on the latest SMSI conference call results?
No sir. As announced months ago, I am refocusing my attention life.
I’ve spent the last 10 years educating folks. That has actually hurt my profits, because I can gain from panics and euphorias, but have been a calming force in both situations.
Now it’s time for those folks to use that education and pass it on to others.
Simultaneously, it’s time for me to do more for me and my family by letting panics and euphorias happen.. and taking advantage of them.
Anyone who has taken the time to learn my lessons (vs. just piggybacking picks) will be at an advantage to those who have not… as it should be 💯😊😇
Makes perfect sense to me. Thanks again for all your time and guidance. It’s definitely paid off for me…….big time!
A little off topic question. Mark are you familiar with the game ready or polar care cube ice therapies to help with post surgery recovery? I am trying to figure out if they are really that much better than something that you can get on amazon. Thanks.
I am not
Thanks a lot for the update, thought you may have put this blog to rest…
Apart from RWM, I think you mentioned also ZROZ and TLT or shorting China during yellow, orange, red alerts. Would be interesting to see these hedging techniques also in a blog special about hedging or in the 1% portfolio
Simple strategies work best for the masses. If I provide contributions going forward, they will tend to be simple and top level.
I wish I have read this earlier. Lesson learned. Thank you for sharing your strategy.
Hi Mark, Would you be kind enough to share any particular reason why you sold MRIN? You put tremendous effort into presenting the investment thesis of the company in a past video. Any insights are greatly appreciated. I hope you and your family are well during this pandemic.
Sorry… just saw this. MRIN wasn’t executing AT ALL like they suggested, so it became apparent that they would just burn all of their cash, so it was smart to get out before that happened.
In stock investing, being wrong is inevitable, so realizing it is an important part of minimizing losses which helps to maximize gains. Hope that helps.
Didn’t want to cloud your WhatsApp so I figured I’d ask here! So what I’m slowly realizing is the best way to get an edge on a majority of folks is the relationship with management (something I’m still working on and getting better at).
Is there anything you would advice in terms of building a relationship with management? What’s the best way to go about doing so? I’ve gotten into the practice of talking to CFOs and IR but sometimes you can only work your way up to the Investor Relations contact versus say the CFO. Any helpful tips?
I’m slowly seeing the benefit of the in person conferences, something I’ve never attended but really would change the game I think.Any particular ones for the micro-cap space that you would recommend? The only one I really know of is the LD Micro Conference.
Thanks for all the advice as always.
Great question. Would also be a great question for the WhatsApp group. Getting in good with management starts with doing as much homework as possible to get to know the company. If you can become helpful to Management with the information you gather, then it’s time well spent for them. So that’s one way.
The other major way is to write up what you learn about the companies. If you are helping to spread the word, then you were doing the company a great service (effectively investor relations and/or part of what investment banks do for them).
I’ve learned so much from you and for that I am forever grateful. On several of your calls you have mentioned that you specialize in technology stocks and there are other people like you who specialize in other areas (i.e. Biotech, Industrial, Energy, etc.). Who are some people specializing in other fields that you respect? As you know, there is a lot of noise out there that doesn’t deserve an ear.
To be honest, I don’t have an answer to that question.
I pretty much stick to my knowledge and team. So, it’s up to you guys to find and judge other people who have expertise in other areas.
But if I find any names I will certainly share them. Thanks for the kind words. Mark
Marc, check out Beth Kindig here: https://io-fund.com/
No worries. Let’s keep grinding.
It is hard to believe you are still at this after SEC come down on you. I guess you have lawyer who told you how can disclaimer yourself and keep scam going. Sad but not surprising. Regardless of disclaimer you are still pump and dump via what you write and how your followers respond it. But I guess because it’s just blog and you’re not advisor it’s buyer beware?
My cousin he lose a lot of money following you the first time and is ruined.
This is America…
Raina, I’m very sorry you feel that way and understand where it comes from.
I doubt there’s anything I can say or show you to prove that there’s no scam. However, perhaps with your own eyes you’ll see that I rarely receive letters like yours anymore. Instead, there are hundreds of old followers (who gave me the opportunity to prove myself) who remain followers, as a result. They are a big part of the reason I donate time to this every week.
Interestingly, I also received the following letter this weekend, FWIW:
Feb 5, 2023, at 9:43 PM
Just want to say thank You
1. I was life time member and paid 5k, when that whole saga happened, I was pissed off, and rightly so
2. Still had trust in you and bought aehr at 6 and then just forgot about that
3 I sold aehr at 37 on Friday and made 45k in profit
4. My life time member fees was recovered and I made 40k
5. THANK YOU
I’m very happy to hear it. That situation left many hurt and justifiably angry. A big part of why I donate time every week is to compensate people like you, who maintained their faith in me (especially when you were given plenty of reason not to).
I’m thankful that my efforts have reversed your financial losses. Hopefully, time does the same for any emotional pain that was caused by the situation 🙏🏽
Congratulations & thanks again for taking the time to write,