Sell All of These Post-Election Winners

BY Keith Kaplan CEO, TradeSmith

I love when the market pulls a rip-your-face-off rally like it did last week.

It’s great to look at your trading portfolio or your retirement accounts and see so much green you almost forget what red looks like.

But there’s a very important thing most people forget to do when we see market moves like that.

It’s an uncomfortable subject… but a necessary one.

I’m talking about those losers lurking in at the bottom of your list when you sort by P/L. You know the ones.

The dogs you still hold because you’re waiting for a comeback. That stock you tried to knife-catch and were a bit too early… or way too early. The name you just keep buying because it’s “just so cheap” and buying more makes your P/L look better.

Market rallies like what happened last week are a gift. Because when the market rallies, your losing positions can surge higher along with it.

That gives you an opportunity to drop those losers from your portfolio at more favorable prices. And that’s what you should look to do.

Remember, you should regularly look through your portfolio and prune out whatever’s not working. If you have a name in there you hate to look at, and you know you wouldn’t want to hold it for another year or more, gut it. Take the loss and move on.

And if you’re a TradeStops subscriber, you can confirm it’s time to move on by checking if it’s in the Red Zone.

This is an especially great time to do this, as we’re close to the end of the year. If you cut those losses now, that could make your tax situation next year potentially more favorable, too. (To be clear: I’m not a tax professional – you should speak to yours to make sure any move you make is the right one.)

So that’s all and well and good…

But how do you know a stock you hold is a true loser with little hope of turning around?

We just integrated an incredible new tool at TradeSmith that helps you find these losers… and expose others that you might not own..

This tools also happens to be great at finding much better stocks for the capital you’re about to free up…

Your Stock Market Report Card

Louis Navellier is a name I hope you’ve heard before.

He’s one of the best growth-stock investors on the planet, and he’s been in the game for more than four decades.

Louis is known as a “king of the quants.” He’s dedicated his entire career to make a science out of stock picking.

What he did was simple, but not easy. He extensively tested as many individual technical and fundamental factors as he could find on a ton of stock-market data. Eventually, he was able to isolate the relative few factors that drove market-beating returns.

This approach has served him well in his long career as an investor, allowing him to home in on stocks like Intel (INTC) in 1993, Google (GOOG) in 2005, Monster Energy (MNST) in 2004, and Nvidia (NVDA) in 2016 – before those stocks soared exponentially higher.

In his career he’s uncovered 18 stocks that went on to climb more than 10,000% each… and even when he makes shorter-term plays, he targets 100%+ gains in a few months – not years.

The system he uses is incredibly easy to understand and implement. It works just like the letter grades you got in high school. Stocks that rate A and B are great… and the D and F stocks are to be ignored entirely. That is, unless you own one.

I’m such a huge fan of Louis’ Stock Grader system, we made the effort to integrate it into our analysis platform TradeSmith Finance. Anyone that subscribes to it through Louis and has any TradeSmith software product can now access it through us, and in some pretty cool ways.

For example, below is the main app on the TradeSmith Finance Dashboard. You can use it to search our database for any stock, then it shows you both the Navellier Stock Grade and how the stock has performed against the market over the last year.

Turn your attention to the box at the right. That’s where you get a list of stocks under various categories – like best by Fundamental Grade, or Quantitative Grade, or Total Grade:

Your Navellier Stock Grader portal will also show you the best stocks by Conservative risk profiles, as well as Moderately Aggressive and Aggressive.

But right now, I have it set to “Sell These Stocks Now.”

These are the stocks with Fs across the board. An F in fundamentals, which indicate poor business performance… and an F in technical, which indicates not only poor price action but poor money flows.

Some of these stocks have popped very nicely since the election. Chemical manufacturer Albemarle (ALB), for example, was at one point up close to 11% after Nov. 5. But, as you saw above, it’s also been underperforming the market all this year… and made investors no money whatsoever. That stock rates an F on both its Fundamental and Quantitative Grade, making it a poor place to park your money.

Look at Bumble (BMBL), too. That stock enjoyed a post-election surge of 18% as money started looking into more speculative small caps. That’s a good rally to sell, as Louis’ system rates the stock an F, too. It’s also lost 41% over the last year… up from a low of -65%.

Here’s the full “Sell These Stocks Now” list, for posterity. If you’re holding any of these names – and some of them are big businesses and former Wall Street darlings, like Intel and SolarEdge (SEDG) – now’s the time to let go.

Now, where to put your salvaged capital?

Two A-Grade Ideas

If we set the category to Top Conservative, two interesting names pop up. One is International General Insurance Holdings (IGIC) which, despite the extraordinarily dull name, has put up serious returns this year and has been rated an A the entire time:

Another is Kinross Gold (KGC), which has obviously benefited from rallying gold prices. That’s also beat the market this year and has been rated either an A or B for most of it, spending a month or so as a C (a grade that indicates “hold”) earlier this year:

This is really just the tip of the iceberg with Louis’ system. You can enter every ticker in your portfolio and get a grade. With just a few minutes of work, you can quickly improve your overall portfolio grade, trim some major losers, and pivot to the winners.

The great thing about Louis is that he’s transparent about why his Universal Stock Grading System likes some stocks and not others…

And he’s very generous with his time – sharing these insights with anyone who asks, in as much detail as they’d like.

I like to run TradeSmith this way, too. And because I’m now partnering with Louis to bring his stock grades to TradeSmith, I’ve called on Louis to present those insights to you in this interview.

Before I sat down with Louis, I asked him for some “real talk” about this system and what’s so special about it. He immediately showed me all of the analysis it was giving him from his Saturday scan of 6,000 stocks.

And that’s when I knew that his Navellier stock grades were incredibly valuable as our next TradeSmith tool to help you buy (and sell) the right stocks – at the right time.

To that end, Louis will share one stock that he thinks you should buy now and one you avoid, to thank you for your time when you watch our presentation now.

All the best,

Keith Kaplan
CEO, TradeSmith