Sunday, April 10, 2011

2011 Master Trader Program Scheduled

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!!!CONTEST WINNER!!!
Mark Ritchie Wins Minervini's Triple-Digit Challenge

Stock Market Wizard and U.S. Investing Champion Mark Minervini announced the winner of his “Triple-Digit Challenge” a contest that started at the conclusion of Minervini’s 2010 Master Trader Program in Myrtle Beach, South Carolina.

Minervini challenged conference attendees to produce a 100% return in their trading accounts within twelve months. “The first one of you that reaches this goal,” Minervini said, “will be welcomed as a guest in my home where you can trade side-by-side with me for a day. All expenses for the trip will be paid by me.”

Mark Ritchie from the Chicago area won the challenge utilizing the SEPA® techniques that Minervini taught in the two-day Master Trader Program. “What can I say, the guy is as good a teacher as he is a trader.” Ritchie said.

Ritchie turned his $25,000 trading account into more than $50,000 in just over five months. When asked how his trading ideas were generated Ritchie commented, “I used screens which I derived from information learned at Mark Minervini's Master Trader Program and on Minervini Private Access and Mark’s blog; such as earnings, relative strength, Mark's Trend Template and other techniques that Mark has disclosed."

Mark Ritchie II with Mark Minervini

There’s more...

Just two days after confirming Mark Ritchie’s results, a second Master Trader Program alumnus reached the 100% mark. Matt G from Connecticut traded his $850,000 account to a triple-digit gain.

Matt G with Mark Minervini

The next Master Trading Program will be held October 15-16, 2011 at the Myrtle Beach Marriott Resort & Spa at Grande Dunes in Myrtle Beach, South Carolina. Reservations are being accepted at www.4traders.info. Seating is very limited.

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WINNER MARK RITCHIE'S STATS AND COMMENTS

Name: Mark Ritchie
Account Size: $25,000
Period: October 20, 2010 – April 4, 2011
Use of leverage: Yes, as much as standard Reg-T margin would allow for, roughly 2:1
# stocks traded: 139
Position Sizing: Aprox. 25%
Net reward/risk ratio: 2.42:1
% Trades Profitable: 43%
Quotes: Interactive Brokers, TradeStation
News: Interactive Brokers, Marketwatch.com, Yahoo Finance

Click to enlarge image

How trading ideas were generated:

Used basic screens which I derived from information learned from Mark Minervini's Master Trader Program, at Minervini Private Access, and Mark’s blog; earnings, RS, Mark's Trend Template and things he has discussed at length.

Technical entry criteria:

Only entered if I had a visual stop on the chart I was comfortable with, the smaller the better, usually in the mid single digits, would look for charts with tightness on the right side with accompanying patterns discussed at Master Trader Program and in his workbook, i.e. cup w/ handles, power plays, 3C's and the like. Once I had determined tradable pivots I would enter upon subsequent breakouts.

Fundamental criteria:

Tried to look for stocks with best earnings, although good technicals would sometimes override fundamental criteria, but basically companies with accelerating earnings and sales, usually 25% or higher

Criteria for taking profits:

This was the toughest part but usually looked at current gain to average gain and where the chart looked at a given period, i.e. if the stock was above my average gain and looked extended I would look to take profits, I would often take profits into weakness when stocks would take out previous significant lows on their respective charts. I also used some of the moving average rules discussed for selling in the Master Trader Program workbook.

Criteria for loss protection:

Get out quickly whenever the stock hit my predetermined loss point, usually the point at which the chart started to break down. When the stock hit my pre-determined loss point I would get out ASAP!

Additional comments:

In short I can say that all the performance is a function of what I learned at the Master Trader Program with the exception of the money management portion, as I have always traded strictly based on the #'s of my own trading, avg. W/L, win rate, etc. So once I became more & more comfortable that I could maintain an edge that was mathematically deserving of a 25% position size I started trading larger and more aggressive. That said on the money management side all of the stock specific criteria as far as fundamental and technical selection I would say came purely from Mark's teaching. I should also add that in no way do I feel that this period was some of my best trading as I made many mistakes and I believe that I am capable of much better overall trading the more I continue to put into practice what I've learned. There's not much else to add other than the guy is as good a teacher as he is a trader!
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MARK MINERVINI'S STOCK SELECTION STRATEGY

Specific Entry Point Analysis® -SEPA®

Specific Entry Point Analysis® - SEPA® was developed by Mark Minervini. The methodology’s foundation is built upon historical precedent analysis of past stock market “SUPER PERFORMERS.” To determine what characteristics make a stock likely to advance significantly, historical models of top price performers and industry leaders are archived in the Minervini confidential database. These models are based upon sets of characteristics prevalent in exceptional winning stocks.

PATTERNS OF EXCELLENCE
On-going efforts are focused on identifying in detail the characteristics of the most successful performers of the past to determine what makes a stock likely to outperform its peers in the future. Based on these attributes, current investment candidates can be compared and scrutinized for criteria in-line with our proprietary Leadership Profile®. This success blueprint is the fundamental basis for our stock selection. The database and profile is continually updated to account for market dynamics and new available data. The SEPA® model takes into account thousands of historic company profiles going back over many market cycles spanning numerous decades. In order to find rapidly growing companies with the ability to sustain above average appreciation, a unique combination of quantitative screening, fundamental research and qualitative analysis serve as core selection criteria for the SEPA® investment process.

Additionally, the SEPA® ranking process scores each company based on earnings surprises, estimate revisions and company issued guidance in order to determine the probability for future price performance catalysts. A unique component of the SEPA® process is a focus on “where” a stock is within its earnings maturation cycle. Each day, computers systematically analyze thousands of stocks for specific data items using a proprietary series of absolute, relative and time dimension calculations. The extensive fundamental research ranks each investment candidate for probable earnings surprise.

Specific Entry Point Analysis® focuses on identifying, company-by-company, the precursors of inefficient pricing in order to distinguish appropriate entry points. Utilizing SEPA® Technology, stocks displaying the potential for significant price appreciation are identified and pinpointed. While nothing is perfect, the proven SEPA® Technology consistently highlights many of the best investment ideas and stock market leaders before they’re widely recognized by Wall Street.
The SEPA® screening process can be summarized as follows:

1. Stocks are screened through a series of "filters" based on earnings, sales, profit margins, relative price performance and price trend characteristics. Approximately 95% of all stocks in the market are eliminated in this first screen leaving roughly 1,000 initial contenders.

2. These remaining stocks are scrutinized and ranked for similarity to a proprietary Leadership Profile® in-line with specific fundamental and technical factors exhibited by historic models. This second stage of qualifiers removes most of the remaining companies, leaving a narrowed list of investment ideas for further review and evaluation.

3. The final stage is a comprehensive manual review. The narrowed list of candidates are examined individually and scored according to a “relative prioritizing” ranking process which considers the following characteristics:

- Reported earnings and sales
- Earnings surprise history
- EPS and sales acceleration
- Company issued guidance
- Earnings estimate revisions
- Profit margins (historic & projected)
- Industry and market position
- Potential "catalysts" (new products, services or industry changes)
- Performance compared to other stocks in same sector
- Price momentum, price trend and trading volume analysis
- Liquidity

The SEPA® ranking process is focused on identifying three key elements:

1. The potential for future earnings and sales surprises
2. The potential for institutional volume support
3. The potential for rapid price appreciation based on a supply/demand imbalance

Profiting from the Earnings Cycle

Individual stocks can go through extended periods of underperformance, in some instances for decades – Eastman Kodak’s stock price took twenty-four years (1973-1997) to just break even while the S&P 500 Index advanced 500%. While some stocks languish, companies with superior improving fundamentals can perform exceptionally well.

Large institutional buyers (mutual funds, pension plans, hedge funds, etc.) have the greatest buying power to influence a stock’s share price. So, what do they look for? Earnings and sales surprise and estimate revisions contribute to valuation model changes and thus impact buying and selling pressure. The subsequent buying pressure that comes from an earnings surprise or a company materially raising guidance generally leads to a higher stock price, which in turn attracts momentum buyers.

An understanding of how Wall Street works and identifying what specific characteristic will attract institutional buyers into a stock is our daily focus. The graph below illustrates a typical earnings maturation cycle and where we focus our efforts on buying and selling within the cycle
Summary of the SEPA® Process

HISTORICAL PRECEDENT ANALYSIS
-Study of the best performing stocks over each market cycle
-Characteristics defined and archived in our database
-Blueprint is constructed based on attributes of winners

COMPUTER SURVEILLANCE
-Computers screen 8,000+ stocks daily
-Narrows down the top 1%
-Companies displaying specific characteristics are identified

LEADERSHIP PROFILING
-Data is compared to all stocks
-Results are compared to a Leadership Profile®
-Profile is continually updated to reflect new information

RANKING AND SELECTION
-Candidates are monitored for specific criteria convergence
-Catalyst such as earnings surprise, company issued guidance
-Entry point defined based on risk/reward

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Mark Minervini's financial advice and SEPA® stock selections sold exclusively to institutional investors for $120,000 annually. Get insight, stories and stock picks from the Stock Market Wizard here FREE!