Againt All Odds

We stumbled upon a recent interview with Mark Minervini, a well known and successful equity trader. It is hard to argue with success, and Mark seems to have had much success with his strategy. Based on the interview, it appears that Mark uses a "normal" strategy of holding cash and looking for short/medium term opportunities to put his money to work.

He uses both fundamental and technical analysis to make his buy/sell decisions. Those of you that are familiar with Precision Trading Solutions know that our outlook is the polar opposite. Our strategy involves being "always-in", which means being either 100% long or 100% short your investments at all times, and never holding cash on the sidelines.

Our feeling is that while Mark may have found some success, there are two issues to consider.

First, only professional traders should implement this type of strategy. The vast majority of traders will not be able to keep their emotions of greed and impatience in check and will lose money with a cash-based strategy. Even professional traders will have a very hard time with consistency over a long time period.

Second, only results that can be 100% verified should be taken at face value regardless of the source. Unless you made the traders yourself or can verify with certainty that the results are accurate, you must take any reported success with a grain of salt. This is in no way insinuating that Mark's results are not accurate, and we assume that they are as he has stated. It is only common sense to be aware that your money should not be risked unless you have certainty of what you are getting yourself into.

On that note, we suggest you click over and read Mark's interview. It is great reading and contains a good deal of valid information.