July 6, 2022



Q&A Summary For Leaderboard April Scorecard Webinar On April 7, 2022

11 min read
Question Answer Last year Leaderboard trailed the return of the S&P 500 (I recall this was stated in the 3/3/22 monthly review). QUESTION: What changes have you made to the strategy this year, if any? Hi Florence, I hope I made a clear answer, but for sure, in late 2020 to early 2021, the big rotation into oil and gas, steel, metals and agriculture industry groups really caught us flat-footed. But not in 2022! Hatman back in the house! Hi Whitney! I’m back indeed. “As you know the M in CANSLIM is very important. I feel one of the most important products/commentaries that you have is Market School, which is available to people who have attended Market School in the Markets tab in Leaderboard. It gives a good guide to portfolio management and market exposure. However this is not available in the leaderboard app and I request that it please be added to the app. Even though we attended Market school and should be proficient in the rules ourselves, the daily commentary really helps in reinforcing and confirming the rules. However recently there has been a delay in updating the rules especially over the weekend. I am not sure how many subscribers are affected but I find this section to
be really helpful and the starting point for my Market Exposure and Portfolio Management. Thankyou.” I had some personal issues come up over the last month. But should be back on a regular schedule. Hi DSC, You should be in Augusta ! His heart is there! “As a new subscriber of the Leaderboard, how should we position/build our portfolio? What is your advise for those positions which are extended now? If overall portoflio is already reaching 100%, what are the chances for new members to add new positions? How often do you add new leaders which are potential buys for starting positions?” Hi Manan! Welcome! 🙂 Check out investors.com/LeaderboardFAQ for some great resources on getting started with us! No AUDIO Check the lower left of your screen and click AUDIO What happened to JBHT stock after Warren Buffett purchase… any news? Transports selling off due to fears of a recession. “1) Can you add RS rating data points to charts 2) study on building positions slowly vs all at once or soon after 3) annotate add/reduce on chart NVDA example 4) Do you treat cyclical stocks different than canslim growth stocks? like take profits at 20% for cyclicals or buy on pullbacks instead of breakouts 5) seems you don’t wait until the end of day or end of week lately..does that change based on market conditions?” Hi Ryan, good point on the RS Rating, it’s worth considering; on MarketSmith we do highlight the 3, 6 and 12-month RS Ratings. Current performance is -5% YTD, is that approximately correct? That’s right, down 5.3% since Jan 1 through Thursday, virtually matching the S&P 500 at -5.5%. Many of the most recent purchases (RMBS, DAC, JBHT, NUE, LLY) have occurred when these names are extended vs the 50DMA…several of these we weren’t able to hold them through a natural pullback…can we learn from these late stage purchases? Hi David, you’re making an excellent point with RMBS. We should have introduced the idea when it was just above the 50-day/10-week lines during that week ended March 18 (the 10-week was 26.89 at the time). But as a general rule, we’ve decided that the buy zone for top stocks goes up to 10% above the 10-week line on the rebound week. That may seem a little high vs. a 5% buy zone from a base breakout point. RMBS, however, certainly broke expectations last week with that reversal from new highs in accelerating turnover. This week’s decline just shows how skittish investors remain in the face of higher interest rates. In the case of LLY, even a trendline buy point was well above the 10-week line; we decided to go with the base breakout price. And if a stock breaks out for real, it will run, and its position vs. the 10-week line will seem relevant. LeaderBoard and IBD mimics the general market. Why bother with a lot of trades and end up with the same result as, say, an ETF? live answered hello all – thank you for all your insights. I have a question regarding exiting positions when they are up 5% or 10%. What is the best strategy to go back in if you see that the stock keeps going up? Wait for a pull back to the 21-day average?
I am thinking of NUE, ANTM or VErtex. Thank you. Francesco Yes. A pullback to the 21-day or 50-day is usually the quickest way to get back in. Are there any historical precedents that are working well with this current market? Yes. In inflationary environments cyclicals and commosdities tend to outperform. We are holding a few techs because of the big gains. Is it too late to consider XLV to LB? Is it being avoid since LB has ANTM and LLY in its portfolio? Yes, and we also have VRTX. Although pretty stout move for XLV today! Why not sell NVDA and tech into strength and buy it back when it looks better overall? live answered In typical conditions most of the stocks you buy are from the Nasdaq. Why do you compare performance to the S&P 500 rather than the Nasdaq 100? The S&P 500 is the standard for the indutsty and this will continue to be the comparison. why does cost basis matter? Cost basis is the original value or purchase price of an asset or investment for tax purposes. The cost basis value is used in the calculation of capital gains or losses, which is the difference between the selling price and purchase price.
Calculating the total cost basis is critical to understanding if an investment is profitable or not, and any possible tax consequences. If investors want to know whether an investment has provided those longed-for gains, they need to keep
track of the investment’s performance. Will the ETF portfolio always be in QQQ’s? I have no heard of any plan to change it. Are we able to access that spreadsheet? live answered what are other inflation plays? For sure, the commodity firms are all inflation plays, not just gold. So, the fertilizer, industrial metals, precious metals and energy (LNG is a good example) all count. “Pls add a way to view the transactions in the website. Entry price for position increase will be different from the initial buy point, when we increase position size. Similarly for exit price for each we trim the positions for ease of tracking.” I will pass your suggestion on to the Product team. You can export the sheet too! Good point! The product team really needs to step up their game. IMHO, the Leaderboard page is about the most irritating page I look at on the internet. I like lists, not little tiny slices of what I am trying to look at. Maybe it’s just me… I will pass on your feedback The positions summary is a great tool! As time goes on, I hope you can update this chart more often. The current chart is one week out of date. Thanks for that feedback; we are working on that! I think you put UPRO on in April/May of 2020 You’re right Jim, most recently that is the case. But on Dec 27, 2018, the UPRO weekly chart in LB shows a double full position got added. The 1st full position exited on Feb 7, 2019, and the 2nd full posn was out on March 4, 2019. Is FTNT a LB consideration? It appears to be holding up well for a tech-centric stock. Definitely; coming back more strong than other software names. I might push hard to add this to the Watchlist first. What is the performance return ytd? ‘-5.93% vs. -5.98% for the S&P. Hi Position Table is erroneous: LLY is 716 entry. RMBS is 212.78. Please update. Thanks I will pass that along for review so you “add” a stock to the leaderboard when it’s time to enter? And time to sell a stock when you “remove” it from the leaderboard? Exactly do you take into account that LLY is a 3rd stage base and has gone up so far already from 2019? Great point Ryan. Absolutely; it obviously would have been nice to have started this position back then! But the relatively smooth price-vol action so far makes us think the rally is still middle innings. Let’s see! Is there any sort of “coaching” session for newbies when we sign up for Leaderboard? Obviously, I’m new. 100%! Harold, a regular on IBD Live, offers a LB coaching session. On the LB landing page, click on the circle with headphones in the upper right hand corner to schedule it. Why no fertilizers in the portfolio ? live answered How do you see LPLA as a potential add to the portfolio? Interesting rebound! Will examine the new cup. Why doesn’t IBD have it’s own index fund that I can purchase? Is IBD considering something like this? We have two ETFs: FFTT which tracks the IBD 50 and BOUT, the IBD Breakout Index. Thanks Jonathan. I just signed up. Appreciate it. Happy to help! You ever get the “Feeling” your picks are being Faded by Big Money ? Sure, sometimes I do; I think it may be some of the fast-moving hedge funds, or it may be some trimming activity by large mutual funds that maintain a core position in the stock. What’s in the future for this tough environment? What stocks are you looking at now? live answered What’s in the future for this tough environment? What stocks are you looking at now? really impressed with some of the heavy construction stocks like FLR, KBR, PWR, J If I hear you correctly with today’s action uptrend resumed? No longer under pressure? Still under pressure. Got support at the 50-day but closed below yesterday’s high. If I hear you correctly with today’s action uptrend resumed? No longer under pressure? We are still under pressure. Today’s rally was looking good, albeit in light volume, but sellers came into the market during the final 15 minutes. Are we going to trim NVDA … if it declines further? At what point? live answered Can you talk about pros/cons of taking profits into strength in VRTX also? If your profit expectations in VRTX have been met, and you sell, that’s a great trade. But if VRTX continues to act constructively, you can always consider buying back shares when we get a solid rebound off the 10-week moving average or if
a genuine new base forms. When you have a feeling it could be both a short- and long-term winner, you could consider selling a third or half the position, then giving the rest more time to possibly blossom and grow. I believe Leaderboard sold the entire CF Industries position into strength. Can the team explain why just a portion wasn’t trimmed? It broke an upper trend line and hit resistance at 100, so we booked the profit. ‘@Chris G and Anon: FFTY is IBD 50 (not FFTT) My fat-finger mistake. I should know better since I came up with the ticker. Someone mention about exporting the summary excel sheet export ? Where do we do that ? the arrow in the upper right of the chart will allow you to export. Any insurance for the watchlist? It’s def worth considering, Francisco! But most of the insurers, especially large caps, really don’t have the strong CAN SLIM characteristics. Feels like a rotation to long-ignored area of the stock market. What about COST? Was on the watchlist. Seemed to have decent move today. We did not have 100% consensus agreement in the team to move it from the Watchlist to the Leaders, so unfortunately COST did not get added. Another reason: our exposure was near 85%, and we wanted to keep cash in the portfolio before this
latest downdraft. Hello David, Can you please use the MarketSmith chart scale on Leaderboard charts? The scale is very different on LB chart. The LB Members would greatly appreciate that look. 21-EMA on LB chart has been useful. Thank you in advance. Hi Jitesh, for sure, the weekly charts on LB are logarithmic, just like on MS. But on MS, indeed, you can customize the scale (standard or best fit), whereas in LB we currently cannot. But this could be something to work on! Thanks for the
suggestion. And yes, 21-day EMA in green is very useful on Leaderboard charts. How often do you do these webinars? First week of every month. Usually Tuesday or Thursday for LB How often do you do these webinars? Once a month! Typically the first week of the month. Can you review how we can detect which sectors the money is flowing into? Anthony, great Q, keep an eye on the IBD 50 list, watch for key changes there. You can go through all the charts via Leaderboard quickly. And we annotate the top 10 charts, too. Any thoughts on Oil, Food, Material sectors? These areas still make sense in the high-inflationary conditions. The food sector is defensive. OXY – would qualify for a three-week tight? Closes need to be within 1.5% up or down for three weeks for that Can we look at LNG and discuss when to start taking profits? live answered is there a webinar for IBD 50? There is not — that list is based on an algorithm, rather than stocks hand-picked by our team like the Leaders List. Thanks so much!! live answered Is it ever an easy Market ? :)) Uptrends are typically easier than sideways or down markets. Thanks DSC! Always trying to learn from your experiences!! Thank you! How to use the ETF market strategy? It’s a great timing mechanism to add exposure with a broad equity index ETF — think SPY, DIA, QQQ — when the market, after a severe decline, bottoms out and marks a follow-through day. The follow-through is the earliest signal that a new
uptrend may be under way. Vote Ken for CEO of all O’Neil operations. Alas, IBD is no longer part of William O’Neil + Co. End of an era, start of a new era. Do you treat cyclical stocks different than can slim growth stocks? like take profits at 20% for cyclicals or buy on pullbacks instead of breakout especially in tougher market conditions like we are in now Great Q; we’re trying to hold cyclicals as long as traditional growth stocks. But we need to be mindful of a meaningful sector rotation. As someone said earlier, I think LB team needs to expand the stock selection in 2022 and possibly add some dividend players. Thanks much for this suggestion; OK, I’ll work hard on adding more dividend plays. TGT was a good member of Leaderboard in 2020 and pays a decent dividend, currently a 1.6% yield as it bases. Thanks so much! YW! thank you, Leaderboard team! Thank you!
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