Finding Big Trends

Big Trends How to Find Them,
Ride Them and Get Off
Howard Lindzon
Ivaylo Ivanhoff
Founder and CEO of StockTwits

@howardlindzon
@ivanhoff
[email protected]
1
Finding Big Market Winners

2
The Harsh Reality
in 3 Stocks Eventually Decline 75%

from Their IPO Price;
Only
1 in 4 Stocks Outperform the S&P

500 during their lifetime
Stock Picking Matters
Where to Find the Winners?
10
11
12
13
14
What Do big Winners Have in

Common?
Many
of them have explosive earnings and

sales growth;
Many had new product/service that was loved
by their customers;
Many looked expensive on the way up (and
paradoxically cheap on the way down)
But
15
All Big Stock Market Winners

Spend the Majority of Their Time on the 52week high list (and better yet, the all-time high
list)
Substantially Outperform market benchmarks

in good and bad times
16
Price Is the Most Important Part of

Catching a Trend
It doesnt matter how smart you are; how

ingenious your investing idea is; Until the market
agrees with you, you wont make a cent. Market
agrees with you, when you see your stocks on the
52-week high, better yet the all-time high list;
The 52-week high list is a raw data point, which

could be enormously useful if you know how to
read it properly.
The 52-week high list is basically a short-cut into

the minds of people, who can create and sustain
trends.
17
U.S. Housing Recovery Is the Market

Story of the Year and It was Told by the
52-week High List Long Before It
became front-page news
18
19
20
21
22
23
24
25
The Magic Of Relative

Strength
26
Relative Strength
How
A Stock Performs Against the Market;
Stocks
That Are Holding Near 52-week highs

and Even Better, Break Out to New Highs
While the General Market Is In Correction
Mode, Are Likely To Become the Leaders of
the Next Rally
27
Trades Near 10-year High while

Market Is In a Free Fall
28
Makes New All-Time High while

Market is in Correction Mode
29
New All-Time Highs While Market is

Making New 3-month Lows
30
In Good Markets, There Will Be Hundreds of

Stocks Hitting the 52-week High List Daily. You
Cant Own Them All. How to Choose from such
Big Pool of Stocks?
31
32
The St50 List

The purpose is to Improve the Odds of Finding the Next Big
winners.
It Saves Research Time By Ranking All Liquid Stocks by the

Criteria that Matters:
-Distance
from 52-week high;

-Relative Strength;
-Earnings and Sales Growth; Acceleration in growth;
-Earnings Surprises;
-And Most Importantly Setup score (based on Moving averages
ratios), which keeps us away from extended stocks.
33
But There Is More to the St50 List

Social Data
You Could See Which of the Strong
Momentum Stocks Are:
Least followed = no one pays attention to
them; there is no hype;
Least mentioned = undiscovered gems with a
lot more potential to appreciate;
Gaining social momentum.
34
35
Momentum In All Markets Is

Interconnected
36
37
A Glass Half
Full
No matter what is
going on in the world,
there will always be
companies that will
manage to monetize
on an undergoing
social or business
trend. If you follow
the 52-week high list,
and better yet the
StockTwits 50 list,
you will know the
ones that are truly
ripe to be owned
38
Ride Them Long Enough To Make a

Difference
39
Holding Is An Important Part

40
Starbucks Might Be the Next

Starbucks
41
Trend Following Is Not for the Faint

of Heart and Get Rich Quick
Dreamers
Anybody Can Buy A Stock, but You Also
Have to Hold It While It Rises In Order to Make
Money
Dont Sell Until A Stock Gives You A Reason
And Yet, Conviction Without Discipline Is a

Recipe for DisasterYou Have To Stick To
Your Sell Rules, No Matter How Much You
Believe in the product/service
42
Pruning Is Important. You Will Have

Losers. Get Rid Off Them
43
How To Get Off
44
Have An Exit Strategy

Some Trends Last Longer Than Others, But
Sooner or Later They all Come To An End
Everything Is For Sale At the Right Price
No Gain Is Really A Gain Until It is Booked
45
80/50 Rule
80% of All Big Stock Market Winners

Lose 50% of Their Move
50% of All Big Stock Market Winners

Love 80% of Their Move
46
I can calculate the motion of heavenly bodies, but

not the madness of people.
47
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49
50
51
Why Trends End
No company can sustain high growth forever;
No company can sustain high expectations forever.

Anything priced for perfection eventually disappoints
Valuation Matters When Markets Mood Shifts from

Complacency and Euphoria to Doom and Gloom
Wall Street is a tireless printing press; sophisticated

distribution and marketing machine. It is in the
business of printing stocks that are under demand by
the market
52
Partial Profit Taking

Too
Extended from Its Rising 200dma (40%+)
Reacts
Poorly to Good News
Look
for Sudden Increase in Short-Term

Volatility. It is often a sign of ownership
transfer from strong to weak hands
53
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55
56
57
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Finding Big Trends

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Big Trends How to Find Them,

Ride Them and Get Off

Founder and CEO of StockTwits

Finding Big Market Winners

The Harsh Reality

in 3 Stocks Eventually Decline 75%

1 in 4 Stocks Outperform the S&P

Stock Picking Matters

Where to Find the Winners?

What Do big Winners Have in

of them have explosive earnings and

All Big Stock Market Winners

Substantially Outperform market benchmarks

Price Is the Most Important Part of

It doesnt matter how smart you are; how

The 52-week high list is a raw data point, which

The 52-week high list is basically a short-cut into

U.S. Housing Recovery Is the Market

The Magic Of Relative

A Stock Performs Against the Market;

That Are Holding Near 52-week highs

Trades Near 10-year High while

Makes New All-Time High while

New All-Time Highs While Market is

In Good Markets, There Will Be Hundreds of

The St50 List

It Saves Research Time By Ranking All Liquid Stocks by the

from 52-week high;

But There Is More to the St50 List

Momentum In All Markets Is

Ride Them Long Enough To Make a

Holding Is An Important Part

Starbucks Might Be the Next

Trend Following Is Not for the Faint

Dont Sell Until A Stock Gives You A Reason

And Yet, Conviction Without Discipline Is a

Pruning Is Important. You Will Have

How To Get Off

Have An Exit Strategy

Everything Is For Sale At the Right Price

No Gain Is Really A Gain Until It is Booked

80% of All Big Stock Market Winners

50% of All Big Stock Market Winners

I can calculate the motion of heavenly bodies, but

Why Trends End

No company can sustain high growth forever;

No company can sustain high expectations forever.

Valuation Matters When Markets Mood Shifts from

Wall Street is a tireless printing press; sophisticated

Partial Profit Taking

Extended from Its Rising 200dma (40%+)

Poorly to Good News

for Sudden Increase in Short-Term

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