One of my biggest trading influences was someone I met later in my trading journey. It’s interesting who we meet along the way and the impact they have on us. Mark Minervini isn’t just a great trader and phenomenal author, he’s also a genuinely good person who truly wants to help educate others and help them succeed in the market.
For those of you who don’t know who Mark is, he is one of America’s most successful traders, is a 30-year veteran of Wall Street. He is the Author of # 1 Best Seller Trade Like A Stock Market Wizard; How to Achieve Superperformance in Stocks Mark has been featured in national media including Fox News, CNN, CNBC, Bloomberg, the Wall Street Journal, Barron’s, USA Today, BusinessWeek, and more. He won the US Investing Championship in 1997 with an annual return of 155% and has also been featured in Jack Scwhager’s “Market Wizards.”
Over the years I’ve built a personal relationship with Mark. It started when I first learned of him and his work after reading about him in Jack Schwager’s Market Wizards series. At the time I was already several years into my trading journey, had already read “How to Make Money in Stocks” by William O’Neil and was deep within that universe. Mark’s take on the markets, trading, and how to be successful breathed new life into what I thought I knew. His ideas were akin to what I had learned from CANSLIM and Investor’s Business Daily. This fresh perspective enticed me to read his book “Trade Like a Stock Market Wizard: How to Achieve Super Performance in Stocks in Any Market“.
I started following Mark on Twitter. We wrote back and forth for quite some time. He later agreed to answer a dozen questions in great detail straight from the ChartYourTrade Community (you can read that interview here). We eventually met up at the Waldorf Astoria in NYC and went to a juice bar a couple of blocks away. Later on, he even gave a special presentation to us at the NYC Investor’s Business Daily meetup. This gave me one of my more useful risk management tactics… using bracketed stops.
I learned quite a bit from “Trade Like a Stock Market Wizard”. Here are some of the highlights:
Knowledge is the fusion of information over time…
“All you have learned and the experience you have gained can bear fruit for many years to come… truly this is what makes acquired knowledge and firsthand experience the greatest tool to succeed and build upon in stock trading and in life.”
This is extraordinarily true and as I reread excerpts and highlights from the book, things make far greater sense and have a fresh perspective today more so than they did years ago. It is true…we never step in the same river twice!
Stop focusing on the money!
“For me, the greatest success came when I finally decided to forget about the money and concentrate on being the best trader I could be. Then the money followed.”
This is something that literally took me YEARS to fully grasp. I mean, the reason why most of us gravitate to the stock market IS to make money… One of the true ironies of the market is that we finally begin to find success after we stop focusing solely on making money and start focusing on the elements that make us the best trader we can be. Those two things are not the same.
Clearly define your style with clearly stated goals
“The average trader spends the majority of his or her time vacillating between two emotions: indecisiveness and regret. This stems from not clearly defining one’s style. The only way to combat paralyzing emotions is to have a set of rules that you operate from with clearly stated goals. You simply must make a decision: Are you a trade or an investor?”
RAISE YOUR HAND IF YOU’VE EXPERIENCED THIS! …both of my hands are in the air!
In the beginning, you need to focus. You need to find yourself. This is something else that took me years to grasp and I experienced this vacillation for years! The one thing that finally got me over this hurdle was separating my accounts. I now have separate dedicated accounts for my short-term, intermediate-term, and long-term ideas.
A Step By Step Process…
Mark shares his entire process step by step in this book. I greatly enjoyed this part of the book. For me personally it confirmed much of what I was already doing. I was fascinated by and thrilled to learn that his style was very similar to my own. Running consistent scans, focused scans, seeing what pops up on multiple scans, filtering down for only the best ideas, running overlay screens, executing trades only at the point of alignment across the spectrum with regard to the company fundamentals, stock price, and volume activity as well as overall market conditions.
Some of the larger points of Mark’s process that stuck out for me include:
- Finding the exact entry point “SEPA” or “Specific Entry Point Analysis”
- The Fundamental criteria that actually matters
- Leading industry groups and sectors
- Companies with rapid growth in a rapid sector… that are in a sense gaining market share in two ways
- Purchasing turnarounds
- Anticipating news and why stocks often move in the opposite direction after the news is released
- Risk Management
After reading Mark’s full process, the most important takeaway for me in this book is still the part that is common to practically every other book I’ve read about stocks, business, or success in general told in Mark’s own unique way… it’s about mindset! In order to succeed, we must have the right mindset, we must put in the work, we must understand that we are on a long journey. What we are looking to achieve is possible, but its a marathon, not a sprint.
In the early stages of my trading journey and even now, this book is extremely valuable. Again, you never step in the same river twice…