Sign up for the FREE January Effects Class that takes place TONIGHT 8 pm to 10 pm EST, plus get a FREE Stock/Option idea that is actionable! Sign up here: https://atg.propreports/registration.php?eventId=653&utm_source=streamsend&utm_medium=email&utm_content=22806999&utm_campaign=January%20Effect%20Preview%20Class%20and%20Other%20Great%20Deals%20Michael%20Waxie%20Parness%20and%20his%20Monday%20Night%20Main%20Event A BRIEF HISTORY OF ME, and the January Effect and YOU! I started my career as a trader in 1998 after getting pounded using a friend who worked for what we now call a Boiler Room. I had a portfolio of companies that no longer exist, or perhaps they do but under some other labeling. Regardless, I was saving up my money to make an independent film called Random Acts of Kindness and was bartending and selling Sports Memorabilia at the time. And, I had saved a lot of money, particularly for a kid from Queens who ran away from home at 15 and lived for a time on a park bench, homeless and penniless. But, Pete, my no-longer friend, had put me in such illustrious companies as Big Smith Jeans. No offense to Big Smith, I mean, the dude (or dudess) may be very cool, but investing a lot of money in a company on the Bulletin Boards, as Ill discuss in future articles, is typically the land of the suckers, or speculators - not for someone trying to protect their money for other higher purposes. These werent AAPL, or FB, or XOM, they were Pink for a reason. I always wanted to be a filmmaker and my script was a finalist at the Sundance Film Institutes Writer/Director Lab. In fact, the script ended up being optioned by Dennis Hopper before he passed away. And yet, lo and behold, as fate would have it, all the Pink Sheet stocks (a step below Bulletin Board) that I was in, they all rocketed in 1998 when I first owned them and at least on paper I had made a pretty stellar profit of about 40% in less than 3 months. Well, I thought, with that kind of return, if I give Pete the rest of my money to invest Ill be yelling ACTION! in no time and my dream of being a filmmaker will be realized! After the crash in October of 1998 the money that had taken me years to accumulate almost all disappeared, those once flying Penny Stocks were all grounded, broken wings and all. GETTING ANGRY At first I was very depressed. My dreams shattered, they died hard and I felt defeated. But, having grown up on the streets, having fought one too many fist fights with the entire 5th and 6th grades (and 7th) as a tough kid, I had learned to fight back - and when someone takes something from you...you find a way to take it back! I got ANGRY! MARIA One day I was watching CNBC and Maria Bartiromo was talking about Day Trading, and she was also talking about how MSFT was set to report earnings and that historically MSFT stock rose into their earnings report in anticipation of them reporting strong profits. TRENDS Now, growing up I was big into numbers and statistics. I could add and subtract and multiple and divide up to 10 numbers with up to 10 digits each and get it right in my head in seconds sometimes. Its part of why I got into what at the time was the best High School in the country, Styvesant High School in NYC. Of course, I was also good at running away from an abusive home and I dropped out and took up space on that park bench in Prospect Park in Brooklyn. Yet, I never lost my talent with numbers and trends and when Maria spoke of MSFTs TREND into earnings, I thought HOPE. And, I took that comment and ran with it, finding other trends that have worked for me and my clients first at Trendfund and now at AffinityTrading where Im COO, and WorldSeriesofTrading where I am CEO. It also got me to the place where I authored (3) Books, one an International Best Seller, Rule the Freakin Markets (St. Martins Press, 2003), and appearances on every major Financial TV network and features in the Wall Street Journal, New York Times, Financial Times and many others. THE JANUARY EFFECT One trend that helped me secure an spot as a Master Trader and Educator of Traders is the January Effect. In fact, its been the most consistent, and most profitable Trend Ive ever seen, played and profited from. So, now that you know a bit about my story, Ill get into what the January Effect is, and how YOU can profit from it! THE DOGS OF THE DOW ON STEROIDS... A very popular and well known trend that some pundits will swear by is called The Dogs of the Dow. Basically, its a trend whereby many investors and fund managers will simply buy the stocks in the DOW 30 that performed the WORST in the preceding year. So, if for example, GE performed poorly, or GM, or in 2014 pretty much any Energy Stock in the DOW, youd just buy them on January 1st, with the thinking that they will rebound nicely in 2015, the following year. And, that trend has historically been OK. In 2013 according to Motley Fool, the Dogs of the Dow stocks beat the S & P by 8.4% which is clearly a nice Ka-chingo! In 2014, those stocks are trending as market beaters as well, though obviously the final stats are not in as of yet. Well update that % at year end. But, theres another Trend that Ive found to be SO MUCH better that its like Trend Trading Steroids. The JANUARY EFFECT! Now, Ill qualify this by saying that I didnt invent the January Effect, far smarter people than me did decades ago when they noticed that, similarly to the Dogs of the Dow, MANY stocks not in indexes, and some in other indexes outside the Dow VASTLY outperform the market AND even better for us traders, they do it in TEN DAYS! Yup, the January Effect is a TEN DAY TRADE. Ive made my entire year in those ten days at times, as have my clients. So, what is the January Effect? THE SET-UP The January Effect gets set up because often times fund managers, and investors start dumping the stocks that have performed the worst on the year around November. By then if they are down 5, or 10, or often times 40 or 50% or MORE they have given up on recouping on these puppies with fleas. So, they dump them, thus exacerbating the losses on those stocks. I mean, it makes sense, if youre a fund manager and youre trying to recruit new investors to invest with you, do you really want to show TWTR in your portfolio to end the year with TWTR down tremendously from 2013s highs? No, of course not, you want to own FB which is up some 50% instead, right? So, all those stocks that have underperformed, and in fact gotten crushed in 2014 become fodder for exaggerated selling to close out the year, even if its not a fund manager looking to make themselves look better, it makes sense to sell your losers to offset your winnings on BABA for the year, right? Tax selling plays a huge part in setting up the January Effect as well. THE PLAY Now, every year I release my list of my Top (10) Stock and Top (10) Option Plays for the January Effect, and you are welcome to contact me to get that info, but if you wish you can also compile a list of your own and see how you do for yourself! I usually break it down by taking the weakest stocks in the weakest sectors, and pick stocks that I feel have a good chance of funds RE-buying them when the new year starts. A stock like TWTR might qualify, or some of the Energy related names. I havent compiled my entire list yet, but those are some preliminary ideas to get you started. START AND END OF THE TREND! I typically start buying these ideas right before Christmas, figure around the 20th. Sometimes I start buying a little bit earlier. My Free Class on the trend is December 10th and so I give out an idea during that then. I want to leg into the trend, I dont want to just buy 10 stocks and 10 options all in one day and be slave to the whims of the market the next day, or week. I want to buy some over the course of a couple weeks so if the market vascillates Up AND Down I dont get blown out on a single or two down days. The official end date of the trend? The 5th Trading day of the New Year. So, the 5th Trading Day of 2015, which is January 7th. Thats the day I want to be out of almost all, if not all of my January Effect trades. Now, I believe the proof is in the pudding, so well see what shakes out with this years January Effect list, but overall weve gone 13 out of 15 winning years, with 1 of those years being a total loser when the market tanked, and 1 a break-even or small loser. The last 3-years have been remarkable for us, weve had many 100%, 200% and more winners with our Option January Effect ideas. I expect this years January Effect to prove fruitful. There are years when I am less confident, but I think there has been such a huge split amongst the haves and have-nots in terms of individual stocks, I believe a lot of the losers will catch up early in 2015. And, I hope youll hop aboard. Have a Happy and Healthy Holiday and New Year Season! Michael Waxie Parness CEO WorldSeriesofTrading *Sign up for FREE January Effects Class for TONIGHT, plus get FREE Trading Idea during class! Sign up here, just cut and paste following in your browser: https://atg.propreports/registration.php?eventId=653&utm_source=streamsend&utm_medium=email&utm_content=22806999&utm_campaign=January%20Effect%20Preview%20Class%20and%20Other%20Great%20Deals%20Michael%20Waxie%20Parness%20and%20his%20Monday%20Night%20Main%20Event
Posted on: Mon, 08 Dec 2014 05:50:23 +0000
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