During the last few weeks, I’ve shared some important pre-trade and post-trade analytical steps that I do for each recommendation in my investment newsletter PowerTrend Profits and for positions in my Thematic Growth Portfolio. If you aren’t doing these, you need to go back and get started by re-reading these two bulletins.
Since those two articles were published, I’ve received more than a few questions about what should be done in between the pre-trade and post-trade analysis.
I thought that was a great question. But before I answer it, let’s consider the difference between a movie and a photograph.
There are many aspects between the two that are very similar — getting the right positioning of the subject or subjects, making sure the lighting is just right, ensuring the wardrobe is appropriate, adjusting for weather conditions and, oftentimes, wrestling with multiple takes from multiple angles. If you’ve ever taken family photos or videoed an event, you know that to do either well takes a lot of hard work.
Despite those similarities, the two are very different. A photograph is a snapshot of a moment in time. It is something preserved for eternity. A movie, on the other hand, is a collection of photographs over time. Think about it: movies may be digital today, but originally, they were a spool of thousands or millions of photographs that told a story over time.
That’s the biggest difference between a photo and a movie — one is a snapshot of a moment in time, while the other is a story that unfolds over time. If you were a buy-and-forget-it investor, your style would resemble something like a photograph. The problem is that buy-and-hold investing, or, as I tend to call it, buy-and-sleep investing, is as dead as the VCR or an 8-track tape.
Chris Versace is the editor of PowerTrend Brief — a FREE, weekly electronic newsletter. He also writes PowerTrend Profits, a paid monthly newsletter that helps individual investors profit through buying shares of companies poised to win big in the 8 PowerTrends, as well as writes the PowerTrader trading service that seeks to deliver short-term gains using stocks, ETFs and options. Chris has been ranked an All Star Analyst by Zacks Investment Research.