Finance Trends Letter

Trading wisdom recap: Steve Clark , founder of Omni Partners, was featured in Jack Schwager's 2012 book, Hedge Fund Market Wizards .  Clark's interview with Schwager provided us with some valuable trading insights; "Lessons from Hedge Fund Market Wizards: Steve Clark" was one of our most popular posts ever. If I had to pick my favorite sections from Clark's chapter, it would be boiled down to these two concepts: "Do more of what works (and less of what doesn't work)" and "Manage your equity curve". Here's his full quote on the supreme importance of growing your equity curve :  "Your job as a trader is to make the line of your equity curve go from bottom left to top right. That's it. Don't get hung up on other supposed "mandates". Protect your capital and the direction of that equity line. "   I will leave you with one last series of quotes from Steve Clark's interview with Jack Schwager. ...

Valeant Pharmaceuticals ( VRX ) is now big headline news, as the stock's downward slide continues to punish investors, big and small.  Hedge fund manager, Bill Ackman of Pershing Square was reported to have lost $1 billion in a single day due to VRX 's latest plunge. Institutional ownership of Valeant's stock was very widespread. As mentioned in our last post, a huge number of hedge funds and mutual funds owned big positions in VRX . Smaller investors may also be feeling the hit in their personal investment accounts or in their pension funds' returns.    Let's not focus too much on the investors who were unfortunate enough to get burned in this stock crash. The media and the investing world are already having a field day with this debacle. Instead, let's take a fresh look at the chart to better understand why so many savvy investors were hurt in this decline. As you can see in this updated daily chart (click to enlarge), VRX had been showing signs of d...

Valeant Pharmaceuticals stock ( VRX ) continued its slide, as news of an SEC investigation fueled additional selling on Monday. The embattled drug company's stock has been trending lower for several months now. VRX ended the day down 18% on volume of 27 million shares, triple its recent average daily volume. After a huge run up from 2009 to mid-2015, VRX began showing signs of topping and distribution (selling by major holders) in the fall of 2015. The stock is down 35% year-to-date in 2016 and down 67% over the past year ( Finviz stats, click chart below).  Let's take a look at the charts and examine the troubled stock's downtrend, and the huge uptrend that preceded it. I'll also offer some ideas on how to avoid major stock declines (or at least limit your losses in such instances ) . Below, the multi-year consolidation pattern that launched VRX 's 2010 -2015 advance. The stock would climb from $2 3 to over $250 in that 5-year period.   ...