ZF Capital

SUCCESSFUL TRADING BOILS down to good decision-making. There are thousands upon thousands of publicly traded securities, and with one click of a mouse an investor can bet on any one of them.
When putting money to work, I concentrate on those situations in which I think there’s a shot of grabbing the first harvest of gains. Stocks will always fluctuate, but for my money, it’s those precious early moments when an investment theme is just being discovered by the market that present the best chance for actually making money.

The first harvest occurs quietly, before the news breaks and before the fundamentals become clear, sending the herd crashing through the door. A speculator must be able to look ahead and become bullish on a theme that appears to be working without a clear understanding of why it’s working. Some investors wait for certainty; I simply look for strength. The news and confirmation most people wait for almost always come after the fact.

Like most professional traders, my portfolio has its share of losers. But on those rare instances when an idea actually starts to make money, aiming for the first harvest means you’re one of the few already in line with a growing, winning trade. It’s a position of true strength: You’re in the black in a winning hand while everybody else is just beginning to learn the ticker symbols. (more…)