Opportunities and dangers emerge every hour that fast-moving financial markets are in operation. That's why our stocks newsletters are published daily with up-to-the minute insights on economic, political, cultural and technical events that affect investments.
Subscribers learn to make serious money using our proprietary, proven stock-picking and portfolio-building approach, which focuses on assembling a diversified group of cheap, low-volatility growth stocks and ETFs on the verge of a breakout.
We believe that value must lie at the heart of every investment, as it is difficult to be successful if you arrive well after the crowd. We focus on companies that have something special that the market has not recognized or fully priced into expectations, whether it is a new product, new service, new management or new sales method. Plus, we are not afraid to recommend that you build sizeable cash reserves during difficult periods.
Jon Markman, our principal author and editor, draws on three decades of experience as a journalist, analyst, stat geek, software developer and fund manager — and his contacts at hedge funds and research firms around the world — to deliver smart, witty, provocative commentary that is both prescient and fun to read. New recommendations are based on twelve-point factor model that includes fundamentals, value, seasonality and historical price action. They are followed up with updates until targets are reached, as well as corporate profiles and executive interviews.
Our trademark approach to stock-picking is an enhanced update of the renowned StockScouter rating system that Markman invented and co-developed at MSN Money in 2001. It is geared to systematically discover mispriced, low-volatility stocks in favored sectors and market-cap groups, and avoid expensive, slow-growing and volatile stocks in unfavorable sectors. Our unique ten-stock StrataGem portfolio, rebalanced monthly, has averaged 21% annual growth from mid-2001 to the present. Equity and bond ETF picks are also geared to focus on value and long-term trends, leveraging monthly signals from a second proprietary model and our analyst team's insights.
Our goal with options is to make leveraged bets on the direction of the underlying stocks and indexes. Plain and simple. Except in rare cases, we don't recommend spreads, straddles, strangles, iron condors or any tactic that requires more than a sixth-grade education to understand. Most of our competitors make options much more complicated than necessary — creating set-ups that have multiple contingencies that are largely out of the trader's control.
We believe in being honest about your purpose: Buy options to speculate on a single underlying security rising or falling in a limited amount of time. To mitigate risk, buy them as cheaply as possible when implied volatility is low, and hold them for as little time as possible. In short, respect them as you would respect a lighted match, boiling water or five-star hot sauce. They serve a specific purpose, but can burn you if misused. We provide options recommendations in two services.
Tactical Options is focused on equity options that are either in the money or slightly out of the money, and expire in one to two months. For calls, we screen our database for fundamentally cheap stocks or ETFs that historically perform well in in the coming one to two months and are currently pausing or pulling back within an uptrend. For puts, we screen for fundamentally expensive stocks or ETFs that historically perform poorly in the coming one to two months and are currently pausing or pulling back within a downtrend. We try to avoid trading directly in front of events such as earnings announcements. Our goal is to sell each position in two exits of 40% and 80% each, while capping potential losses at 40%. We tighten stops as a play progresses, bringing them to break-even once our initial goal of a half-position sale at +40% is accomplished.
Counterpoint Options focuses on equity, bond and volatility index options that are in the money and expire within two months. The system uses a quantitative method similar to our Gemini futures program, screening for conditions in which the S&P 500, Russell 2000, VIX or Ten Year Treasury Note indexes have ripped too far, too fast in one direction and are likely to reverse. This system scales into positions up to three times to improve the average price, and typically sells positions all at once for gains of 20% to 80%-plus.
The futures markets have for too long been the exclusive domain of the very wealthy. They have been difficult for individuals to penetrate in large part because their inner workings have been kept deliberately opaque by insiders. Individuals who have attempted to pierce the veil have discovered that they have piled up losses quickly because they brought their old equity market habits — mostly naive trend-following — to the game. This is like bringing a knife to a gunfight.
Our approach is different. We have licensed a set of proprietary genetic algorithms, called Magnitude, that are trained to apply the findings of behavioral economics, chaos theory and particle physics to financial futures markets with aerospace-grade precision.
Magnitude algorithms analyze current market conditions and adapt to them. No rules are set in stone; the system organically improves itself every single day. Our two futures services yoke the Magnitude algorithms to advanced risk management techniques to create dynamic portfolios that are optimized for consistency, low volatility and minimum time-in-market exposure. The services recommend precise entries and exits that seek to take advantage of mistakes by the majority at risk. Magnitude traders are typically buying when the mob is selling and selling when the mob is buying.
The Magnitude algorithm was developed by an independent proprietary research and development firm, and is exclusively licensed for distribution by Markman Capital Insight LLC. Unlike most competitors, Magnitude constantly evolves so that it generates the appropriate signal for a given condition in a nuanced way.
You see, market participants’ emotions create price velocity and movement for stocks and bonds. So any given price represents the balance between optimists’ and pessimists’ point of view. Magnitude programs are built to get under the surface of those emotions and determine where they are likely to find their next equilibrium. They seek pockets of predictability in a mostly chaotic market.
Futures are the ideal market for the Magnitude algorithms because they represent the largest pool of liquidity. If you are looking to capitalize on crowd effects, you need a big crowd. More than $60 billion in e-minis are traded per day. That makes them the market’s most actively traded equity futures contract. This market is so big that it cannot be manipulated like individual stocks. It gives us a very pure and fair field in which to exercise and profit from the Magnitude algorithm's insights.
Using a systematic approach eliminates a lot of the mistakes that human traders make due to internal biases that cannot be shaken no matter how much we try. Individuals are hampered by a need to understand and rationalize financial events. Well programmed software is not. By the time unknown variables become self-evident to everyone, the move has already occurred and is complete.
Recommendations and adjustments are transmitted from 8 am ET to 9 pm ET. There is very little to learn, except how to enter the trades, and nothing to interpret. You only need an initial margin account of $35,000 to $70,000 at a futures brokerage such as RJ O'Brien, Striker Securities, AMP Trading, High Ground Trading, Interactive Brokers, or Think or Swim. Retirement accounts, such as IRAs, are fine.
Members who are new to futures, or do not have the time to set up trades themselves, can have the system traded by a professional broker who receives the system's recommendations directly. These set-ups, called "auto-trading" or “broker-assisted trading,” are common in futures. Costs are very reasonable, amounting to commissions of about $10. Ask us for a referral.
In sum, Magnitude progams allow you to take advantage of volatility as never before. You will come to see volatility no longer as your enemy, but as your ally.
Past results are no guarantee of future returns. All accounts may not achieve comparable results. Futures trading involves the risk of substantial loss.
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT.
IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.