Jay Shapiro’s Important Tips and Facts for Stock Market Investing
Jay Shapiro is a swing trader and occasional day trader. He is a novice amateur investor who makes triple digit returns annually (thus far) by remaining a novice and holding to a very strict set of trading principles. These tips are for entertainment purposes only and only intended for investors who are just starting to learn how to invest. It is a well understood fact that some more advanced investors do actually make money with options and advanced trading strategies but Jay does not use those strategies and will not be recommending them.
STRONG BUY RATINGS - Buy ONLY strong buy rated stocks!!!
VALUE - Purchase stocks that are at least 10% lower than the 52 week high.
NEVER SELL - Never sell a stock at a loss. If you keep 40 or 50 stocks in your portfolio at any given time you can generally sell a few of them every single day at a profit and then reload with other stocks and repurchase the same stock after it decreases closer to the support level.
TAKE YOUR PROFITS - Sell stocks when they go up 3% in one day. Many people chase dream stocks hoping that they go up 10, 20 or even 10,000% but what they fail to realize is that there are 220 trading days in a year so in theory a 3% return is actually a 660% return assuming the stock were to go up 3% every day. Naturally it won’t go up 3% every day but when you have 40, 60 or 100 stocks in your portfolio you can always find at least one or a few stocks that did go up on a given day!!!
QUALITY ESTABLISHED COMPANIES – Invest only in NYSE and NASDAQ companies. Do not purchase stocks OTC. Jay owns a couple OTC stocks, one of them being Aston Martin. You can always break your own rules but be VERY CAREFUL about investing in OTC (over the counter). Penny stocks can be a great way to make a strong return but limit your portfolio exposure to 3%
TIMING – Stocks tend to go up on the 1st and 15th of each month! You do not need to be fully invested every day. Sell, take your profits and put more in the market when stock futures predict a rise, just before the 1st of the month, before the Friday before a holiday, before triple witching day and of course learn to monitor seasonal fluctuation. Certain months are better than others and many stocks are seasonal.
EXPERTS – Find out what the experts like Warren Buffet are investing in. Read online the stocks listed in the top producing institutional funds.
DON’T FOLLOW THE CROWD – Chasing IPO’s and investing in popular stocks may seem like a way to make money but its a trap and does not work for the novice investor. If solar is popular now you should be selling your solar stocks, taking your profits and moving on to the next industry that is not popular now. Find a repressed industry with stocks that are trading like bottom feeders. Purchase those stocks at low prices and hold them for several years if need be. You might be surprised to find out that you do not need to hold those stocks for very long to make a nice return. Jay predicted that GE stock would make a comeback in the summer of 2020. He made nice returns with GE and everybody called him a fool for doing so. Learn to be confident buying the stocks that everybody else thinks only a crazy person would buy.
MORNING POPPERS - Stocks tend to pop between 9am and noon. Scroll thru your list of stocks and sell off those that went up higher than 3%. If you see that the stock is still climbing rapidly hold on to it until it peaks out and starts to come back down. Learn to develop the skill of monitoring the peaks and valleys and how stocks navigate them.
USE MARGIN TO YOUR ADVANTAGE – Margin is a good thing and not a bad thing. Learn how to use it properly. The broker charges 5% per year for margin. A good trader can make that 5% up in one single day!!
BUY STOCKS BEFORE MERGERS – After a merger the price of the smaller company that is being purchased always increases in value when it gets swallowed by the larger company. *roughly 99% of the time this holds true but not always.
BUY STOCKS BEFORE EARNINGS REPORTS – Learn to gauge how earnings reports affect the price of a company’s stock.
NO FEES – Never pay trading fees. There are plenty of apps and programs out there now that offer buy and sell completely free as many times per day as need be. Jay buys and sells about a dozen times per day on average.
JOIN AN INVESTING CLUB – Being part of an investing club or facebook stock trading group is a wise idea primarily for learning the industry and sometimes for the stock tips. Be careful about the stock tips but watch the more advanced traders in the club and learn the industry from them
Our investing club is free to join, it is titled: The Day Traders Mafia and is located at: