The Punchbowl is Empty for Those Late to the Party

If we must say so ourselves we’ve hit the ball out of the park in the brief time this blog has been in existence. With few exceptions our picks have been exceptional gainers.

But that doesn’t make us geniuses. What it makes us is pretty good at timing the market and picking stocks well positioned to move aggressively higher with the market when it makes its move. We could make picks using the same criteria when the market has another posture and be spectacularly mediocre or even unsuccessful.

This is why the number of recommendations we have made of late have been few. Of note the only one we made last week, Neutral Tandem (TNDM), was a dismal failure. Let’s take a look at some reasons why.

Most people will immediately turn to the chart and in retrospect point to a number of factors that doomed it. But we’ve seen “faulty” patterns work often enough in the past to dismiss these objections.

Others will point to a management that suddenly has a more cautious outlook. But Apple (AAPL) management is consistently cautious in their guidance and that hasn’t stopped that stock from being one of the largest winners of the past half decade.

We think that TNDM was unsuccessful because it was late to the party. It’s that simple. The market resumed its uptrend in mid July and immediately a number of stocks, including many that we profiled, started to launch higher on volume out of their patterns. Many quickly gained 15, 20, even 40% in the case of STEC. And TNDM? It sat there not doing much.

When the market is moving and a stock isn’t moving with it that makes the stock a laggard. While it could well launch on a big run the odds are lessened. True leaders assert themselves soon after the market turns itself loose.

This is why we are reticent to profile other stocks at the moment. For now your best chances of investing success are to watch those stocks that have made good moves and patiently await an opportunity to climb on board. That seems counterintuitive but historically those stocks that move late tend to be lesser stars and we are after only the true leaders.

We’ll be following all of our stocks and making suggestions for alternative entries in the Comments section underneath each write up.