Randy

"I prefer to be either in a really hot sector or just in the growth names..." – @Qullamaggie KQ puts a lot more emphasis on fundamentals, or the theme/story than many may think. Check out this clip where he talks more about it. "Even if you get a good setup on a random stock, it's probably not worth it. Especially if you can choose from like these growth stocks...like if you have plenty of growth stocks and then you have some random stocks, focus on the growth stocks, because earnings are fuel." – @Qullamaggie "You need a reason for something to go up, stocks don't go up just because there's a certain pattern to it, ok? You find the stocks that have a reason to go up and then you look for patterns on those stocks, because patterns are just something that can increase your odds of success and maximize your risk/reward." – @Qullamaggie

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Charlie M

@traderCharlieM

11 months ago

What Chris Kacher and Gil Morales describe as The Big Stock Principle one of the best descriptions I've ever seen on identifying the right stocks to be trading. Year after year, decade after decade, the stocks that not only went up the most, but were the most obvious, all were part of the leading growth sectors of their time. During any given market cycle, there tends to be 1-4 groups that are the main growth narratives of their respective cycle, with leadership between them rotating on a weekly/monthly basis. And I'd say that depending on the market cycle, there are only maybe 20-100 names within these groups that truly fit The Big Stock Principle. Stocks that have big stories of growth that are liquid and institutions must own. And if you can only have so many names in your portfolio, why would you shop anywhere else except in these names? "Focus on the top 100 stocks, top 100 liquid momentum stocks, you don't even have to look at anything else. That's where you get the best longs and where you get the best shorts. It took me so long to learn this, I'm ashamed, it took me like 8, 9, 10 years, well maybe not 10, 7-8 years for me to realize it. I was also all over the place for years and years, you think something looks good, but look, if it's not a momentum leader, it's probably a waste of time." - @Qullamaggie "Its only the minority of stocks that have driven all market returns for the past 50/100years, and our job as traders is to be in those stocks, that’s why I’m always telling you guys, get in the momo leaders, don’t even bother with anything else, that’s where the money is. There’s a lot of random stocks that look good, like GPRO, looks good sure but it’s not a momo leader this is not where you make the big money." - @Qullamaggie P.S: Of course, the main caveat would be the speculative meme names in each of these groups that don't have the institutional backing, which is why I say to heck with the institutional backing, as long as it has the story (aka proof/promise of future growth) and is liquid.

traderCharlieM's tweet photo. What Chris Kacher and Gil Morales describe as The Big Stock Principle one of the best descriptions I've ever seen on identifying the right stocks to be trading.

Year after year, decade after decade, the stocks that not only went up the most, but were the most obvious, all were part of the leading growth sectors of their time.

During any given market cycle, there tends to be 1-4 groups that are the main growth narratives of their respective cycle, with leadership between them rotating on a weekly/monthly basis.

And I'd say that depending on the market cycle, there are only maybe 20-100 names within these groups that truly fit The Big Stock Principle. Stocks that have big stories of growth that are liquid and institutions must own.

And if you can only have so many names in your portfolio, why would you shop anywhere else except in these names?

"Focus on the top 100 stocks, top 100 liquid momentum stocks, you don't even have to look at anything else. That's where you get the best longs and where you get the best shorts. It took me so long to learn this, I'm ashamed, it took me like 8, 9, 10 years, well maybe not 10, 7-8 years for me to realize it. I was also all over the place for years and years, you think something looks good, but look, if it's not a momentum leader, it's probably a waste of time." - @Qullamaggie

"Its only the minority of stocks that have driven all market returns for the past 50/100years, and our job as traders is to be in those stocks, that’s why I’m always telling you guys, get in the momo leaders, don’t even bother with anything else, that’s where the money is. There’s a lot of random stocks that look good, like GPRO, looks good sure but it’s not a momo leader this is not where you make the big money." - @Qullamaggie

P.S: Of course, the main caveat would be the speculative meme names in each of these groups that don't have the institutional backing, which is why I say to heck with the institutional backing, as long as it has the story (aka proof/promise of future growth) and is liquid.

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Charlie M

@traderCharlieM

11 months ago

Breadth is overrated. If you're trading the absolute best, leading stocks in the market, why does it matter what the thousands of other random stocks are doing? In bull markets, the best stocks can make monster moves for weeks/months on end while breadth inches lower and lower. And in bear markets (when breadth is bad), what good does it do to know where market breadth is if you're still going to only be trading the best of the best stocks based on the merit of the setups/stocks? It's just noise... Breadth was falling off a cliff in December 2024 as Quantum Computing stocks made some of the biggest speculative moves of this decade. Breadth diverged against the indexes and leading stocks for nearly 2 full years from mid-1998 to 2000, one of the best periods to trade of ALL TIME. Pundits and bears in the media would constantly harp on about how breadth was hitting 12-month lows while indexes continued going higher. Even Dan Zanger in Sept 1999 (a month before the NASDAQ exploded 50% higher in 2 months) expressed worry about the Accumulation/Distribution being "far more pronounced to the downside today than was 1929 and similar to 1987." However, he was right to say that "This in no way implies a crash, but does imply a high level of risk." And guess what he did? He deferred to setups on the leading stocks, and made one of the best audited performances of all time. “I at times wonder why I even look at breadth…it’s not needed if you just follow the process of the main strategy, it’ll do everything for you.” - @OliverKell_ "If you throw every breadth indicator anyone's ever spoken about out the window, you're not gonna have any issues in my opinion." - @OliverKell_ "I don’t look much at breadth, no, because some of the biggest winners...they’re gonna work anyways, some of the strongest sectors, they’re gonna work even if the breadth is low. Like usually what happens after market corrections is the first bounce, the breadth is insane like everything goes up, and for every leg higher (this is what we saw also this spring/summer) the breadth kinda deteriorates and deteriorates and fewer and fewer stocks and sectors going up. But our job is not to trade all of the stocks and sectors, our job is to trade the strongest stocks and sectors, so I don’t care what the breadth is. Or I do care, at some point it matters obviously, but you can just see doing your scanning which stocks are going up or not...breadth can also be very misleading..." - @Qullamaggie If you're trading the top 10-50 stocks in the market, breadth most of the time IMO just adds noise to your process and takes attention away from more important things.