Big Trends How to Find Them,

Ride Them and Get Off

Howard Lindzon

Ivaylo Ivanhoff

Founder and CEO of StockTwits

@howardlindzon

@ivanhoff

howard@lindzon.com
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Finding Big Market Winners

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The Harsh Reality

in 3 Stocks Eventually Decline 75%

from Their IPO Price;

Only

1 in 4 Stocks Outperform the S&P

500 during their lifetime

Stock Picking Matters

Where to Find the Winners?

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What Do big Winners Have in

Common?
Many

of them have explosive earnings and

sales growth;
Many had new product/service that was loved
by their customers;
Many looked expensive on the way up (and
paradoxically cheap on the way down)

But
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All Big Stock Market Winners

Spend the Majority of Their Time on the 52week high list (and better yet, the all-time high
list)

Substantially Outperform market benchmarks

in good and bad times

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Price Is the Most Important Part of

Catching a Trend

It doesnt matter how smart you are; how

ingenious your investing idea is; Until the market
agrees with you, you wont make a cent. Market
agrees with you, when you see your stocks on the
52-week high, better yet the all-time high list;

The 52-week high list is a raw data point, which

could be enormously useful if you know how to
read it properly.

The 52-week high list is basically a short-cut into

the minds of people, who can create and sustain
trends.
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U.S. Housing Recovery Is the Market

Story of the Year and It was Told by the
52-week High List Long Before It
became front-page news
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The Magic Of Relative

Strength
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Relative Strength
How

A Stock Performs Against the Market;

Stocks

That Are Holding Near 52-week highs

and Even Better, Break Out to New Highs
While the General Market Is In Correction
Mode, Are Likely To Become the Leaders of
the Next Rally

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Trades Near 10-year High while

Market Is In a Free Fall

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Makes New All-Time High while

Market is in Correction Mode

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New All-Time Highs While Market is

Making New 3-month Lows

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In Good Markets, There Will Be Hundreds of

Stocks Hitting the 52-week High List Daily. You
Cant Own Them All. How to Choose from such
Big Pool of Stocks?

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The St50 List

The purpose is to Improve the Odds of Finding the Next Big
winners.

It Saves Research Time By Ranking All Liquid Stocks by the

Criteria that Matters:

-Distance

from 52-week high;

-Relative Strength;
-Earnings and Sales Growth; Acceleration in growth;
-Earnings Surprises;
-And Most Importantly Setup score (based on Moving averages
ratios), which keeps us away from extended stocks.

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But There Is More to the St50 List

Social Data
You Could See Which of the Strong
Momentum Stocks Are:
Least followed = no one pays attention to
them; there is no hype;
Least mentioned = undiscovered gems with a
lot more potential to appreciate;
Gaining social momentum.

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Momentum In All Markets Is

Interconnected
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A Glass Half
Full
No matter what is
going on in the world,
there will always be
companies that will
manage to monetize
on an undergoing
social or business
trend. If you follow
the 52-week high list,
and better yet the
StockTwits 50 list,
you will know the
ones that are truly
ripe to be owned

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Ride Them Long Enough To Make a

Difference

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Holding Is An Important Part

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Starbucks Might Be the Next

Starbucks
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Trend Following Is Not for the Faint

of Heart and Get Rich Quick
Dreamers
Anybody Can Buy A Stock, but You Also
Have to Hold It While It Rises In Order to Make
Money

Dont Sell Until A Stock Gives You A Reason

And Yet, Conviction Without Discipline Is a

Recipe for DisasterYou Have To Stick To
Your Sell Rules, No Matter How Much You
Believe in the product/service

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Pruning Is Important. You Will Have

Losers. Get Rid Off Them

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How To Get Off

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Have An Exit Strategy

Some Trends Last Longer Than Others, But
Sooner or Later They all Come To An End

Everything Is For Sale At the Right Price

No Gain Is Really A Gain Until It is Booked

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80/50 Rule

80% of All Big Stock Market Winners

Lose 50% of Their Move

50% of All Big Stock Market Winners

Love 80% of Their Move

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I can calculate the motion of heavenly bodies, but

not the madness of people.
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Why Trends End

No company can sustain high growth forever;

No company can sustain high expectations forever.

Anything priced for perfection eventually disappoints

Valuation Matters When Markets Mood Shifts from

Complacency and Euphoria to Doom and Gloom

Wall Street is a tireless printing press; sophisticated

distribution and marketing machine. It is in the
business of printing stocks that are under demand by
the market
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Partial Profit Taking

Too

Extended from Its Rising 200dma (40%+)

Reacts

Poorly to Good News

Look

for Sudden Increase in Short-Term

Volatility. It is often a sign of ownership
transfer from strong to weak hands

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