Nike and Under Armour Continue to Dominate The Athletic Apparel World

Screen Shot 2014-09-26 at 8.02.37 AM

Nike ($NKE) IPO-ed in 1980 by raising $5 million from the public. Today, some startups raise more money in their seed stage. $10,000 invested in Nike on its first trading day, is worth $2.56 million today.

$10,000 invested in Under Armour ($UA) on its first trading day in 2005, is worth $100k today.

Both companies make fantastic products that we all love to wear. One major difference between the two is that Nike is a well-known international brand, which derives 53% of its revenue outside of North America. Under Armour is still a brand for local consumption. 94% of its sales come from North America. If it ever catches up with Nike internationally, we might see a repetition of Nike’s long-term success.

Check my latest book on Amazon: The 5 Secrets To Highly Profitable Swing Trading

How To Trade Alibaba

Over the past two weeks, I received more than ten emails asking me about Alibaba. I realize that most people in the U.S. think that Ali Baba is a hero from an old Persian fairy tale, but traders are fully aware of the Chinese Internet giant. The interest seems bigger than the interest for Twitter.

Here’s what I’ve been telling people.

If you could get a small allocation before its first trading day, get some shares and sell them near the close of the first trading day.

If you are looking for a long-term investment, I’d wait for at least one earnings report to pass and see the market reaction to it.

If we are talking about swing trade, I would not touch it for a few days. Let it settle and build some type of a base.

It will probably offer good intra-day opportunity for nimble traders. Again, you want to look for some type of a base on a 5 to 15 min time frame and buy a breakout with a stop the low of the base. 

Here’s a an example of a recent IPO – $RWLK and what to look for in $BABA, which is the symbol of Alibaba.


The 5 Secrets To Highly Profitable Swing Trading

swing tradingThere are two major ways to consistently make money in the market:

1) Hunt for several huge winners in a year. Build large positions in them and ride them for monstrous gains.

2) Hunt for hundreds of 5% to 30% short-term winners, where the goal is to compound capital quickly by actively moving in and out of them.

There is not right or wrong approach here. Both have place in the arsenal of each active market participant.

Everything comes at a price. If you want to catch a 200% to 300% long-term winner, you have to be willing to sit through multiple consolidations and several bigger than 30% pullbacks. Not everyone has the stomach to ride big stock market gainers, but maybe you don’t have to.

If you sell all your winners, when they are up 20%, you will never catch a double or a triple. Fact.

What is also true is that in any given year, there are a lot more 20% moves than 100% moves. If you learn how to catch hundreds of quick 5% to 20% moves, your capital could appreciate very quickly while you keep you keep the drawdown in your account to a minimum.

Swing trading is among the fastest way to grow capital if you learn how to properly apply its principles. Swing trading is all about velocity and opportunity cost of capital. The goal is to stay in stocks that are moving quickly in our favor and avoid “dead money” periods.

Stocks move in 5% to 30% momentum bursts that last between 2 and 10 days, before they mean-revert or go into sideways consolidation. The goal of every swing trader is to capture a portion of a short-term momentum burst, while avoiding consolidation periods. Then to repeat the same process hundreds of times in the year by risking between 0.5% and 1% of capital per idea.

The beauty of swing trading is that it provides many signals. You don’t need to risk a lot per signal. You won’t second-guess yourself whether to take a signal or not. One trade is not going to make your year or your month, but it also won’t ruin it. It relies on the magic of compounding. The idea is to grow capital quickly by being leveraged to the hill during favorable periods and being mostly in cash during unfavorable periods.

I know that if you apply the principles I describe in this book, you will become more knowledgeable, more profitable and happier market participant.

Here is a brief overview of what you could expect to learn:

1) What drives short-term market moves? How to recognize perfect swing setups; when to buy them and where to put your stop losses.

2) When to sell and how.

3) How to be more profitable. How to improve your success rate and where to hunt for big short-term gainers.

4) How to manage risk properly. How to decide how many shares you should buy of every stock you like. How to check if you have an edge in the market.

5) How and why to time your market exposure.

This is a really good book on swing trading. Check it out on Amazon.