Eve Boboch: These Covid Reopening Stocks Could Be The Next Cycle’s Growth Leaders

okay hello everybody and welcome to investing with ibd sponsored by vantagepoint today is march 17 2021 i'm your host richard pierce and we have eve boba returning back to the show eva's a portfolio manager and market strategist at ropel capital management she's also the co-founder of the life uh co-author of the life cycle trade thanks for being here eve so great to be here with you again arusha i was just thinking back last time we got together it was the right after the market turns it was april of 2020 and we weren't quite sure if the market was gonna start a new bull cycle it was uh it was really an interesting time and again it's an interesting time that we've chosen to talk you're absolutely right so on today's podcast we're going to talk about this interesting market that we're in we're going to talk about what you need to do to become a better trader and then we will end with a few current ideas let's get into the current market the market is in a confirmed uptrend but uh we have five distribution days on both the nasdaq and s p 500 because we did not uh get a fall today yet e what are your thoughts on this market well it's very interesting if you look at just growth stocks you'd think that we just went through a bear market yes i mean the nasdaq only created it went down maybe like 13 in a few weeks but if you were a growth investor and if you had a portfolio full of growth stocks some of these stocks corrected maybe two or three times what the nasdaq did so fitting the definition of a bear market for growth stocks what's interesting is on march 5th there was a pretty significant reversal that was that friday and so far the nasdaq did get support at the 100-day moving average it's regained the 50-day moving average so i think the jury's still out if this correction and growth names is over but what's interesting is the divergence where you see the russell and other indexes near all-time highs and the the nasdaq um has been hit much harder than some of these other indexes and and certainly the growth stocks as well so i would say that if you know for me when i'm trying new positions after being a little bit lower on exposure through this correction i look for my positions to give me feedback on on the market and you know so far any new positions it feels like it's two steps forward and maybe one step back so it's certainly not the same character of market that we saw in the second half of last year where growth stocks were doing you know fabulously well there were so many to select from and this this market has a little bit of a different uh character feel to it yeah so for girl stocks for sure it seems and you said it it's two steps forward one step back or sometimes one step forward two steps back there you go right now yeah uh it's so there's some rotation too right into the reopening place so we've had markets in the past in past years where you've only had like maybe a handful of big growth leaders so i don't know if what we'll see is a little bit different in the continuing year from what we saw in 2020 or if we resume after this correction i think the jury is still out it's going to be interesting to see how 2021 progresses yeah and with the the jury's still out yesterday we we started out strong and then by the end of day we reversed and i was like wow okay maybe this market is going to get a little bit more of a a pullback than than you know we anticipated then of course today did the exact opposite gap down now all the way right back up now you mentioned an interesting thing here about there are going there are some markets where there are only a few growth stocks that are the true leaders in that market and you better have a couple of those uh now are you always focusing on growth stocks or are you gonna at times like in this kind of market where a lot of these reopen trades have been working uh pretty well are you are you switching over to them well i i want to be flexible i want to be able to adapt to what the market conditions but honestly where i've made the most profits is from growth names so i certainly have a bias to those um i may be open to you know a select very strong reopening play but i'd lean towards the growthier reopening plays and and i think we'll talk about that when we talk about the the segment where uh the theme that i'm focusing on for for this year the the other thing i wanted to mention as well is just the big picture perspective and i always want to take a step back because you could easily get in you know look at the daily action in the market and get thrown off and and there's this roller coaster reversals lately which is which is normal when you're going through this correction trying to see if we're going to come out of it but if you look at the big picture the the average cyclical bull market lasts for around two and a half years so if you think about the the last true bear was really last year right march uh turned in april so we're probably about 11 months in to the bull market and then if you look at it from a larger bigger picture perspective the super cycle and you think about the average super cycle last 17 years and depending on where you start counting let's say you start counting from march of 2009 well we're about 12 years into the super cycle so it's interesting to kind of step back i think sometimes from the daily action even from the weekly action to try to look at the big picture i mean that doesn't mean we're not going to have corrections like we just had along the way but i think that helps to put it in perspective the other thing that's interesting that i wanted to mention oh i'm sorry go ahead no no no no no no keep going keep going oh the one thing i wanted to mention is i always try to look for precedence not that they're going to affect my decision making in the market but it's just kind of interesting to see so if you mapped out remember last year the the covid pandemic beer was just a v-shaped recovery i mean i think it shocked everyone it certainly shocked me but if you think back remember 1998 and we had that similar severe correction v-shaped recovery so it kind of reminds me of that a little bit i mean who knows but if you map the uh the lows of 1998 bear market with the recent bear market in 2020 it would put us somewhere around october of 99. so it's kind of interesting and if you look back at that market it's corrected quite a few times um it corrected to the 100 day and you know and then recovered and then you have that final last run up into 2000 right right so if we were in let's say october 1999 i'd be off for that because you'd look at the chart and it's that final run just like you said yeah through the through the march 2000 so i mean it's just something interesting i'm not going to make decisions based on that but um it's interesting to take a look at and it did have that that v-shaped recovery yeah that's interesting to bring up that 1998 market because i just remember looking at that market and once it got going and it was very very tricky but once it got going it was like every day was up and it just kept going and going and and those who were waiting for the pullback waited months and they were left out right and right it was hard to get in exactly yeah and and that's that's almost what happened last year where it's like you better get in a little bit because you're you're not gonna get in uh and you're gonna not have that pullback because everyone was just kept slowly moving in and in and just kept pushing the market up now going back to another comment that you you mentioned about the perspective how close every day how close are you watching the market are you are you glued to your screen those six and a half hours or are you taking a break you know watching closely in the morning and then and how the the markets close at the end of the day great excellent question arusha on some days uh i i am monitoring much more closely i mean i'm always monitoring closely but i don't want to be there watching every tick because i can really throw you off like even in a market like today if you looked at the crazy reversals you could easily you know a portfolio could have been way down this morning and then you know up by the by the close so i'm always watching very closely in the morning the open like for the first hour and then i'm always watching very closely an hour before the close the clothes is what's what's very very important and i do take breaks it's very important you know i'll get on the treadmill you know during the quieter time maybe around noonish and try to get away for walks whenever it's nice out it just helps clear the mind it's just so important not to be tied to the screens all day long and then i set alerts so even if i am away i know exactly you know where all the positions are no i i mean that that's uh really good advice there um now let's go over uh your thoughts on 2020. so you mentioned earlier it was it was around a year ago i think it was in april i think uh when you came a lot last time on and it is funny we were definitely nervous at that point and unsure and honestly i i almost feel like unless it's a clear kind of picture-perfect correction with a picture-perfect follow-through i'm always going to be nervous uh what were your overall thoughts on 2020 well 2020 was the most unusual year for growth investing so many opportunities and such strong price moves in growth names i haven't seen anything like that i've been investing and trading since 1995 and i haven't seen anything like it since the late 90s it was definitely if you could say anything about the year i would call it the year of the ipo and i would say and spax in brackets and if you look at it there was a record number of ipos and then there was there were so many companies going public via these special purpose acquisition companies and just a few years ago we haven't even thought about that i mean i looked back just to check i mean in like 2016 i think there were maybe a dozen or a little bit around a dozen or so spax but if you looked at it last year there were almost like 250 i think it was like 248 or something and ipos i think it was close to 400 so and a record so definitely the year of the ipo and any if anything in terms of a mantra for 2020 and uh this is one that i know a lot of people have heard it's don't fight the fed yes i mean the monetary policy as well as fiscal policy was supportive of higher equity prices and so those are the thoughts that pop into my mind right away but from a trading perspective when you think about these records in terms of the number of ipos record number of specs i think stacks raised something like 83 billion last year and there's i don't know there's 400 or plus some specs that are currently out there in different phases and many of those are still looking for an acquisition target it is a secondary indicator but it does signal a bit of frothiness right just when you have those kind of records and it's continuing it's continuing this year so if you look that's if you look at some of the the numbers right now there's still a lot of ipos coming out and a lot of stacks so yeah it's interesting from that perspective for sure and and that always gets me nervous but i think you said a key thing there it's a secondary indicator because anytime i see like i think it was like what four years ago or so there are a lot of ipos that were starting to come out and they were starting to do really well and they're just kind of becoming rocket ships and that was also a pretty good secondary indicator but sometimes they last a lot longer that that one only lasted maybe a month and then then the market really came in hard this time just kept going and going uh so let's end this segment on one of the stocks that you were in last year and and that you did well in tesla talk a little bit about that um and and how you ended up listening to the market and and were rewarded for it by it okay well thanks for asking arusha i know we were talking a little bit about this it's interesting to me because it underscores a lesson in my mind so you know flashback to like march april of last year and all the the types of news that we all heard and how the market was behaving and what the stock charts looked at you know through that severe correction and then i'm always looking you know towards the bottom of a bear market and as a new rally starts i'm always looking at you know which stocks are are leading and so you know i had this opinion you know obviously the economy was shutting down i was thinking you know obviously people are going to be losing jobs people might be holding on to their money because the world is very uncertain at the time and so i had this opinion that um a car company couldn't really do that well in that environment but as i was going through the charts i started to you know watch all the charts that were performing well and tesla's chart tesla started acting very strong and for those of you who are listening to the podcast when you get home you can always go to investors.com podcast and take a look at the the video version and see the chart of tesla so if you look tesla made a low i believe it was like march march 18th and the nasdaq actually made a low there but it didn't it made a lower low on march 23rd okay and so before it bottom so right there it's like a small detail yeah but tesla was acting strong it was stronger than the index so it did show some strength right away then it just took off i mean amazing it turned and from march to april the stock ran up almost i think it was like it was from top to bottom it was probably close to 150 it was definitely over 100 so and that was just the start of the move and then if you look at the chart it just went very tight so that just meant to me that no one was in there selling at this price even though the stock had already advanced off this low so much it was barely budging at those levels and so i pivoted i mean i went with the price action and so i finally decided that my opinion was wrong in may of 2020 and and i bought tesla and i still hold those core shares in the stock and the reason i'm telling this story is because i could have missed the trade of a lifetime by being stubborn by holding on to my opinion and the chart was just telling a different story and it was it was telling me that even during this pandemic this company was going to was going to do well and so i followed price and and i just think that's that's very important not to be stubborn with opinions uh sure everyone's going to have an opinion of the market of different companies of different charts but it needs to be it needs to be consistent with what you see in the price action and so i learned a big lesson it's going to stay with me even though that was a positive lesson i mean it turned out to be one of the my best trades ever it's it still underscores that because i could have i was so close i mean i even you know i talked to other portfolio managers on a weekly basis and for a few weeks i was just have you guys noticed tesla i just don't understand it how could they do well how could this talk too well and uh so i had to go i had to go with uh with the price follow the price and uh and and change my opinion because obviously my opinion was wrong yeah and and in the end the market is always going to be right and that's the best lesson that you can learn one that you make money and usually if you end up losing money or missing out on a huge opportunity and then you have to learn the lesson and hopefully apply it a few years later so the market is back in an uptrend uh so make sure you are managing your risk and let the market slowly pull you back in okay it's still volatile play small and as you make progress then you can start to increase those positions so let's take a quick break but when we return we're going to talk about what you need to do to become a better investor we'll be back want to dominate the stock market this year with the second stimulus rolling out you may be guessing which trades are the best to invest in but with vantagepoint you don't have to visit www.freestockcoaching.com and find out how vantagepoint's ai technology can forecast stock market trends up to three days in advance with incredible accuracy vantage points patented technology analyzes huge quantities of global data in seconds stop guessing check out www.freestockcoaching.com and experience vantagepoint for free trading involves financial risk and is not suitable for all investors past results do not guarantee future performance eve bobac is our guest on investing with ibd sponsored by vantagepoint okay eve before we talk about what you need to do to become a better investor let's first talk about the pent-up demand stocks oh yes so last time when we talked in in 2020 in april the theme that i picked for the year was covid related and so the stocks we talked about were were zoom peloton and chewy and it's just an amazing it's amazing to look back at how far those leaders went in 2020. it always shocks me um i think peloton from the when we talked in april up until its peak was up like 400 percent zoom 300 and chewy i think was 200 so just amazing yeah but for 2021 i'm looking at a different theme so i'm looking at what i like to call the pent-up demand theme and just thinking about it where people have you know many people for over a year have probably forgotten some of their vacations some entertainment going out and and i'm sure they're ready to resume that pretty soon and and so that's the theme that i'm looking at and when we talk about stocks uh later today i i will go over um three stocks that i'm looking at uh plus one bonus one real quick perfect no i i like i like that little promo there eve so so before we get into that you know you definitely want to go through the whole podcast to to get those stocks but um let's get into uh certain things that you need to become to be a better investor you mentioned before that you have been doing this for a number of years now uh and uh so what are what are some of the things that that you're doing to help yourself become a better investor well i thought about this in preparation for the podcast and i'd really say there's three practices that i find very very valuable in terms of evolving and growing as a trader and the first is having a small core networking group of other traders of other successful traders and communicating with them on a regular basis and i'll tell you a little bit about the networking group that i belong to and kind of what we do to to make all of us better traders and the other area or the other practice is completing a regular trading plan and i'm going to talk a little bit about what we call our plan we call the ride the wave plan and if you've watched any of jim ropel's podcast to the audience you'll know he's talked a little bit about that as well so i'm going to talk a little bit about how that that's very helpful and evolving as a trader and then um just very briefly on mentoring and both the benefits of having a mentor and then also mentoring others mentoring other younger traders so let me just talk a little bit about the networking group and what we've done over the last like maybe six months that's been very helpful so i meet regularly with a small group of portfolio managers and proprietary traders and they're across the country so we meet via zoom and you know we always develop the agenda and one of the things that it's all with the idea of we all want to grow learn from each other and become better traders and so what we did recently and this has been very helpful is we looked back and we said well what were the two you know like two big winners last year i mean there were so many but we chose zoom and peloton and then we actually looked and we mapped out and shared with each other how we each traded traded those stocks you know where we bought them where we sold them what were we thinking and so we learned a lot from each other it's really a helpful process and the other thing that we do is we know each other's straight trading styles so well and we share so much information that each of us shared what we thought about the traders in the networking group in terms of like top strength and top area for improvement and one of the things there is focusing on strengths but also there may be like one area that's holding a traitor back and it's important to know that and maybe uh work on that area and shore up anything that's causing a big problem for a trader and so we've shared that with each other uh it's very eye-opening and it's it's very very helpful yeah and and yeah you mentioned jim roblin and one thing that i learned from jim was uh if the criticism stings it's probably true and and so i'm sure there might be a little bit of stinging sometimes when you get definitely yeah and so what one of my i'll just share one of my strengths and one area that i need to work on so a strength is i'm i can identify big leading stocks early on so it's something about the market research the screening and i'll i'll identify them early and the area that i need to focus on is kind of tied to that where sometimes i'll identify those big leaders but maybe i don't capitalize on it entirely so the holding enough of a position through through a big run capturing a big part of the run through the drawdowns how to approach that so i'll just share one thing that a rule that i've made for myself in 2021 have a minimum cut off in terms of how i will reduce the core position when i'm trading what i believe is a high conviction you know early uh life cycle potential big winner and and i've set that at a five percent minimum uh for myself so the jury's still out we'll see how that works uh well this year for me but that's a little bit about what can come from these uh networking groups yeah i think that's uh that that's a really valuable lesson that that and that's a really good suggestion too uh and and i'll share for for one of the stocks that i was in was tesla i mean we talked about that a little bit in the the earlier segment but for some sport some of my accounts were i didn't come when the tesla came in and it was during one of the last runs uh some accounts i completely got out of it when it really sold out i was like okay let me just lock in the games some other accounts i kept it i reduced it down to five percent position when tesla got going again and broke out of that final consolidation in 2020 the accounts that i have that five percent position i was able to quickly increase it back up to a fifteen to twenty percent position great and the accounts that were zero i never got back in and yeah it's amazing if you just have a little bit in there how at least for me how much easier it is to just quickly increase it versus that price anchoring bias that you kind of fight yourself saying oh i sold it down here how can i buy it up here or whatever there's something that's a great example yeah because a lot of it is psychology right yeah and then you're watching it closely you have that position the lower cost position yep that's that's that's great so let's see uh the ride of the wave oh okay um yeah that's the other thing that i was going to mention is the the weekly trading plan so exactly it's called the ride the wave plan we even have like someone surfing to remind us of that on our plan it makes it fun to complete it right yeah it's we so uh i do this every week and it's so helpful i'm just telling you a little bit about the process and what's included on the template so we're looking at our market view so i'll be sitting down and saying what's my market view on a scale of one to ten both short term and intermediate and of course long term and why and then as part of the chart review i'm identifying what are the top like let's say three charts that i've identified and out of that also what's my top stock idea for the week and those are just some of the categories but one of the most important ones i think is also like recent over or under performance so i'm analyzing like the past week did i over or under perform my benchmarks and is it something that i'm doing what's what's causing that that over or under performance and looking at both of those both both the negative and the positive just important to be able to adjust to the market so that's on a on a weekly basis and also really the listing my holdings where am i going to stop out so it's like a plan for each of the holdings am i going to add what am i going to do with that holding and and why and then also important for i think this market in 2021 these are two questions that i took from dr brett steenberger's um writings both his book and his articles and he is a he is the best trading psychologist and uh these questions we include in our template and there are two questions what's working in the markets and what will you do to get in sync with what the market is rewarding and i think the reason they're so important especially now is you know how would you answer that question given the current market what's working in the markets it may not be exactly what was working before right right well i mean the reopen trades working stocks are working a lot of the new york stock exchange stocks are working and um all the stocks that i bought earlier this year are not working um exactly for me too right i think yeah and so it this helps i think in terms of the planning so given you know given what's working in the market given what i'm doing as a trader uh what's my strategy for the following week and um i still want to remain flexible and adapt to the market but i have this plan i have a plan going into the week and um and then i can adapt from there but it really is a great great practice i think to do on a regular basis and we as a group also meet with some other portfolio managers on a monday and then talk through our plan so we share again so this is an addition to the networking group and this really helps um to to hold us accountable um so we're talking to each other and you know what went right what went wrong and we're also sharing ideas so so very helpful i would i would highly recommend that no that that's that's really good especially the accountability part talk about the the mentoring aspect so i have been very very lucky in in my trading career i've had just wonderful mentors over the years and i think it's so important so if if a trader is is new to this learning even if they've been trading for a while i think it's very important to seek out mentors but also i wanted to mention i think i mentioned that last time as well i touched on it because it's just so important but also to be a mentor yourself and i am currently the mentor for two younger traders and it really tends to to keep you sharp right you have to answer their very interesting and very good questions um you know review the rules and think about the discipline of trading when you're teaching something you have to know it very very well absolutely and so i've just found it to be very rewarding both ways and if another benefit if the traders are younger you get that peter lynch principle right you get the maybe the gen z perspective on companies that you may not have yeah yeah i mean it it's amazing you everyone out there is going to have a little bit more expertise than someone else in a particular field right and so if you are interacting especially with younger people or or people who are just in completely different areas you may stumble on a great stock and actually get a little bit better of the story or understanding from that person exactly so i i highly recommend it um both you know seeking out mentors and uh and then also mentoring others when when a trader is ready for that and i think it's it's a great experience and um the learning is is you know it's both ways now eve to end this segment talk about the asymmetrical trade opportunity because i think this is a good reminder too not every trade is necessarily the same yeah that's that's an excellent point arusha so what i'm looking for is in in terms of the risk management side i'm going to have a set stop that i have so my my downside is limited right well what i'm looking for is those rare opportunities and and tesla is is the great example here because when when i did enter that trade in in may um of 2020 i could set a stop and say well if i'm wrong i'm stopped out but on the opportunity front we had just gone through a bear market this was one of the strong names that was acting really well and it had real upside opportunity because it had corrected significantly and now was acting very well from a technical perspective and you know eventually we would come out of this pandemic so the market is always looking ahead and obviously this this for this company investors were looking ahead as well and so the downside is much less than the potential upside and when i see those kind of opportunities i'm going to press up on the position size so this is going to be a larger holding and it grew over time i'm going to take a larger position size into an earnings report if it's if it's an early life cycle move especially when it's after a bear market no that that that's that that's the key right there is knowing where you are in the cycle what type of stock you are and when to push it so knowing your strengths and weaknesses as an investor will help you know when to be aggressive in the markets and when to stay out coming up next we are going to talk about a few ideas stay tuned tired of reading about other people getting rich in the stock market today is your day vantage point's artificial intelligence has predicted countless market reversals helping traders weather any storm up to 72 hours in advance visit www.freestockcoaching.com and find out how their ai automatically recognizes global market patterns well ahead of the news to help you pick the best trade go to www.freestockcoaching.com to join a free live training session today don't delay save your seat now trading involves financial risk and is not suitable for all investors past results do not guarantee future performance we are back with eve bobac on investing with ibd sponsored by vantagepoint okay eve let's get in a few ideas but before we get into the few ideas go ahead oh yes just wanted to mention that the stocks that we're going to talk about today i have positions in and you know of course this isn't any recommendation to buy or sell any stock and if they didn't act well i may have to cut the position so just wanted to mention that everyone needs to do their own due diligence absolutely so let's get into the first stock here and this is uh airbnb and let me pull it up so i wanted to bring this one up because it is on theme so the so my theme for 2021 is the pent-up demand theme and i'm thinking this company also is on the disruptive side it's disrupting the hospitality industry somewhat and if you think about it many people have delayed vacations right so um with covid still not completely gone people may feel a little bit better booking a home maybe for their next vacation versus staying at a hotel with a lot of people so i think the story is there the other thing that attracted me to this name that i do have a position in is that it came out of this small ipo consolidation so it's a new name and if you look at it on a weekly chart um it's it was under accumulation so i think it has like six weeks up in a row and this is not an illiquid name this is a very liquid name so someone's in there someone large is in there buying and taking a position in this name it did get support at the moving averages in terms of the life cycle trade we talked about life cycle phases and i would say that this stock is in the ipo advanced phase and we'll see what it can do it's it's forming another bit of a short consolidation here and we'll have to see how it it does from here but i do think it fits into our theme and uh it's acting pretty strong given the market and i know you agree with this too i mean this is just one of those big brand names everyone knows this right right and and right and they're almost and they're fitting in with that theme so that that's why it was um attractive to me so uh anything else you see here on the the stock or anything else oh well just uh in the next one we're going to talk about is uber but whenever you're using a uh a verb as you know the company's name as a verb that's that's a sign and you know you're airbnb you're you're ubering so just another plus yeah but that being said if it starts to sell off starts to trigger your stops you are out because in the end the market is right and you're gonna manage your risk uh so you mentioned you mentioned uber let's go over to uber ticker symbol uber and i have it here on the the weekly chart and and what is uh interesting about this stock to you okay and i do have a position in this one so in terms of our life cycle phases it's i would say it's in the institutional advance phase and the reason for that it's cleared the turbulence zone which would probably that be that uh hot left side high of uh 47 ish and uh it's you know it's advancing it's it's a little haggard here i mean it's it's holding the moving averages um but it has cleared the turbulence and uh hopefully it would go into an institutional advanced phase and it is on theme as well when you think about it you know people need to get around if they're going to be doing more traveling if they're going to be going to more events seeing more people um their their business should pick up and i should mention also i'm going to talk a little bit about a screen that i run off the march 5th low airbnb does show up on that screen uber does not so uber's been chugging it's not one of the most powerful off the bottom but if you look at it it didn't correct as significantly as some of the other growth names and it's not that far off it's high as as some other names and i want to mention too i don't know if i always do a little bit of market research so um if if you read the news that uber bought drizzly uh oh yeah so so yeah what what is drizzly i didn't hear about it so drizzly is um is an app where you can load onto your phone and now only if you're 21 and you really need a drink after a particularly challenging market day you can uh bring up this app and order liquor and a few more few minutes in they're gonna deliver it to your doorsteps oh my god it's very dangerous and purely for you know of course i researched it purely for market research purposes but i did try it so it's very interesting so you know uber we think of uber but they have uber eats they have this new acquisition with drizzly they have the uber reserve which you know people want to reserve in advance um so so they're kind of branching out and we'll see we'll see how the company does but one thing i also want to mention with the whole covid scenario the pandemic last year a lot of these names won't show um the kind of revenue growth that i'm usually looking for uh in the numbers and and that could be due to you know the closing of the economy and so so i'm making some adjustments there i would prefer to see um stronger revenue growth now you mentioned the the turbulent zone do you like to usually buy ipos as they're emerging out of that turbulent zone or are you sometimes buying them when they're in that turbulent zone well uh that's an excellent question if it if the stock goes through um and just like a super breakaway gap i i may buy a name even before it clears that level okay um what i have found though however when it gets close to that level you're usually in for turbulence and that's why we called it that so so i try to avoid that turbulence though not always very successfully but because not all of them do it but many do and you could get caught in like a basing or you know get whipped out shaken out when it hits that area so it's just an area to be aware of and see with the the action of the stock and if it powers through there uh very strong strongly usually it's going to leave that area behind but not always perfect so now the the third stock uh that we're going to talk about is bumble and it's ticker symbol bmbl and here's a new ipo that came out on february 11th and of this year and uh they're forming a little ipo base so why is this one on your radar so i have a position in this early uh it did try to move out on that uh gap um it is still forming an ipo base and we'll have to see how it does i mean it could either attempt to break out and work here and start an ipo advance phase or it could fail so we'll have to watch it closely i think this name is on theme uh with people you know socializing more wanting to go out more this company has a lot of competition but they have a little bit of a twist on the dating app and they're also not just about dating uh they have two other angles uh one is networking social networking with their bumble biz app and uh and they also have a bumble bff so if you're looking for friends let's say you're in a new area yeah you can you can look for friends there and they own badou which is a popular dating site in uh in europe so they come you know they have quite a bit of competition in this space uh but certainly the the technical action has been good so far i feel like it's on theme uh they have a different angle from their competitors so i think it's uh it could do well but we'll have to see some companies some stocks that ipo go through a failure rather than advance so uh we'll just have to watch the action closely and i'll be watching it closely yeah and and uh you know obviously when you spend all this time doing the research on the ipos and coming up with these different phases yeah um and i'm really classifying them coming with your own names and you and kathy and the rest of the group did did that but uh that how much did that help you once you classified all these different little stages and you know where it is in that life cycle how have you seen you know how much does that help you once you start to apply it to real trading that's such a great question arusha because all of us have talked about this uh as as a team and it's helped all of our trading performance and meet for from myself personally it's just been so valuable i when i analyze my trades i do very well in like the early life cycle trades both the ipo advance phase and then catching the institutional advance phase early you know i watch for these things that we learned as part of the research the the turbulent zone i know from our research that that initial ipo advance phase uh you need to use uh our research showed that we need to use faster rules faster sell rules you know take profit rules on that phase because many times that whole advance will be uh will be undercut and then there'll be this due diligence phase where the stock goes sideways to down for for quite some time before it actually starts a mature run and comes out from a mature base and we call that the institutional advanced space and that's where you can use uh where we found in our research that we can use longer term uh hold rules and and try to hold on for bigger moves than new leaders no yeah it's uh and the reason why i asked that is when i was studying earnings gaps and stuff like that and started just classifying them in different kinds of places where they could be in their run i found it helped me a lot to kind of strategize and and how to approach those uh kind of setups or even just how they should act afterwards so it's really cool to hear and and so anyone listening out there i think that that's a good thing to do if you see something over and over again you might want to study that a little bit more and maybe you can come up with your own classifications but just to help yourself right and you'll probably end up helping yourself just in your own trading performance um so let's so glad it was helpful arusha yeah no it it it's really cool and especially even your classifications in in in your book the life cycle trade i'm just looking at those more and more and so it is helping me to uh just going along with your classification so it's really cool breaking these all these little things down more and more i mean that's essentially what bill o'neil did years ago right where right he yeah he didn't invent the couple that couple would handle but he really classified it and defined it and this is the couple of handle we're looking for or this is the flat base and all those kind of definitions and repetition and just looking at them over and over again resulted in being in the the right stocks at the right time yes definitely you know one thing i forgot to mention about bumble bumble also shows up on that power screen i call it the power screen that's the screen that i run off of um march 5th the friday lows and i do that after a correction and what i'm looking for there is just very quickly is a price move so what's what are the strongest stocks in terms of price move from the lows on that day and i'm also looking for more liquid names and you know if it has strong revenue growth all the better of course in this environment i'm adapting a bit on that because of the bear market and the pandemic last year and usually you know just anecdotally i've been doing this for many years and it seems like it catches usually a couple of the the big leaders for for the new uh rallies so uh both airbnb and bumble showed up when i ran that screen early on from that low day and the other bonus stock that shows up which is already a mature stock but had unbelievable performance last year and i was kind of surprised to see it is tesla does show up so if you just go based on a strong move from the bottom i mean it had you know it went from what 70 to 900 and then it's of course corrected significantly recently but in the context of that move and then the fact that it's showing up on the screen that's interesting so so i would include that in in a stock that could continue on and and i have positions in all of these names but i wanted to share a little bit people asked about the screen i had talked to a few people and and they were interested and it's something that i've done for a long long time and it does seem you know you're going to have stocks that that don't do well but it seems to to pick up some of the a couple at least of the of the new leaders of the new rally yeah and and you also do want to run some screens uh that are that are looking at the market in different ways so that i i really like that screen that you're looking at where you could be making a potential low here a lot of times what i'm doing is i'm running a relative strength line new high and saying okay which ones are coming up that way but um yeah you want to see that kind of out performance and any way you can find some of these stocks uh you'll just have to find it right you don't even have to have someone else telling you and but you can capitalize on it that's that's all that's uh needed yes very true so there are a few ideas that are worth considering thank you for joining us today oh it's my pleasure arusha thanks so much for having me and i just want to wish everyone a great 2021 and a very prosperous year cheers everyone cheers and so next week we will have matt caruso on the show matt is the president of caruso investments so that's it for this week on investing with ibd i'm arusha harris and thanks for listening and for this week's nilton charts make sure to go to investors.com podcast where you'll find details for each episode in the podcast episode section and make sure to subscribe rate and review our podcast if you haven't already we'd really appreciate it you can also send us your questions and comments to investingpodcast investors.com we would love to hear from you and may use your comments on an upcoming episode hey everyone thanks so much for watching investors business daily on youtube if you want to watch more videos make sure you hit that subscribe button so you don't miss a thing

Channel: Investor's Business Daily

Views: 4,293

Rating: 4.8476191 out of 5

Keywords: investor's business daily, Eve Boboch, Roppel Capital Management, Tesla, Uber, Airbnb, Bumble, BMBL, TSLA, UBER, ABNB, post-covid, coronavirus, reopening stocks

Id: cDhXmj7yiAM

Length: 50min 45sec (3045 seconds)

Published: Thu Mar 18 2021