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Mark Gomes
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With over 20 years of professional experience, Mark Gomes has grown to become one of the world's most experienced technology stock analysts. He is also a Masters Track & Field world record holder and U.S. Gold medalist (http://www.fasterthanforty.com/hello-world/). Currently, Mr. Gomes is... More
My company:
PTT Research & Pipeline Data, LLC
My blog:
Poised To Triple
My book:
Faster Than Forty
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  • How The Masters Made Their Millions / Billions

    Let me start by saying, "I am a nobody".

    It's true. While it's also true that I have a great track record of predictions and picks, NONE of it would be possible without those who taught (and continue to teach) me how to invest with success.

    This is why I consider myself to be nothing (except a student).

    Accordingly, "my" track record is ONLY the result of utilizing the lessons of truly great investors who have been great-enough to share their wisdom. Refusing such valuable wisdom would obviously be stupid. Thus, I have spent the past 25 years reading, listening to, and adhering to lessons from some of the greatest investors ever. Indeed, my personal mentor was himself taught by the legendary Jim Rogers.

    I am blessed...and only seek to share my blessings with others. After all, that is another lesson the masters teach.

    Studying greatness is often how greatness is achieved. Thus far, the masters' teachings have enabled me to average close to 40% annually for the past 18 years, which is 400x your money (its simple math: 1.4^18-1)!

    This has required a lot of work, but in the end, all I've had to do is follow their lessons and avoid their mistakes. Indeed, they all say that they could perform much better if they could do it all over again.

    By learning from their lifetime of experience, that's exactly what we get to do.

    What I Learned From Lynch: Invest in what you know.

    How I seek to enhance that lesson: I outsourced "what I know" to people who know more about a given subject than anyone else. In the Internet era, we can now "crowd-source" what we know too!

    What I Learned From Graham: Buy cheap, sell opportunistically. The value of the company trumps the movement of the stock over time. Growth stocks are more attractive. Wall Street consensus is a 50/50 proposition, because Wall Street uncovers all the value and hypes that value into the stock (remember, they make their money by stimulating investor transactions).

    How I seek to enhance those lessons: The most value often exists where nobody else is looking...or when everybody believes there is none.

    What I Learned From Buffett: Find the hidden value; Find the sustainable competitive advantage.

    How I seek to enhance those lessons: The competitive advantage doesn't have to be sustainable if it is relatively new. There is great money to be made by riding short-term advantages. It requires a more nimble touch, but the rewards can be tremendous, as we have discovered first-hand!

    What I Learned About Valuation: Growth rates and operating models are the key. Lynch says to focus on estimating the 3-5 year growth rate (actually "guestimating", because nobody knows for sure, ever) . Graham said 7-10 years. Buffett seems to prefer looking out into eternity.

    How I seek to enhance those lessons: I say, focus on a time frame that is just long enough for the masses to become exuberant. Wall Street is a hype machine that is constantly in search of something to hype. We can't stop it and barring extreme legislation (won't happen -- the fat cats contribute too much to campaign coffers!), it will never change. So, we might as well use it to our advantage. If we pick stocks that the sell-side eventually jumps on, we will make money and be able to exit into their hype wave.

    For the sake of anyone interested, I have started to assemble the best video lessons I could find, which will be made available as a cleanly-produced production soon under "Methodology" at PoisedToTriple.com. In the meantime, here are some raw notes from my YouTube content-gathering mission:

    This first video = Warren Buffett. The first 2:00 = turning $40 into $5 million. Also 3:30 - 4:30 "I mistakes when I have a lot of cash...I do something dumb."

    http://youtu.be/N9Ny6pjCS-8

    The next video focuses on Peter Lynch

    http://youtu.be/P5RroqvVCPc

    0:22 - 1:00 provides an intro to Peter's greatness

    At 1:00 - 1:17: every time the market dropped 10% or more, his fund dropped 10% or more. Yet, over the course of 13 years his fund returned 2600%!

    3:37 - 3:55 stocks are volatile. The average range for a stock in a year is 50% between its high and it's low. the stock market is a long-term investment. If you don't understand and accept this, you should not be involved with stocks.

    4:30-4:45 even good stocks take time to perform, not 2 or 3 months.

    4:50 - 5:10 when to sell a stock...when another one is better! This is another reason why we graduate picks.

    5:11 - 5:20. it takes time for Wall Street to realize that a story is great, so give it time!

    9:24-9:40 the story doesn't change quickly!

    10:27 - 11:12 The market drops...and NOBODY can predict it.

    11:13 - 11:38 market drops take down stocks that have nothing to do with the reason for the drop. = great opportunity.

    13:41 - 14:04 profit and profile determine when to sell.

    15:01 - 16:29 small caps rock but big ones can rock too (STX LGF FB)

    16:29 - 17:24 a stock has nine innings. Don't buy in inning 1. Great find - gold mine.

    21:27 - 22:37 turnarounds / fallen angels / hated stocks...wait for proof of turnaround. Great find - gold mine.

    25:05 - 26:10 stock ultimately follows earnings

    27:30 - 28:00 PEG ...but I say PE is BS

    40:28 - 43:59 r/r !!!

    13:30 disagrees with my sell-when-it-triples strategy, but his picks have generally crossed the chasm. My picks are usually in an earlier stage and often have to go through a "trough of disillusionment" phase before crossing the chasm. We can (should) explain this. On another note, I agree with him in that "selling if it drops X%" is a bad strategy.

    This one = Warren Buffett on Benjamin Graham. AWESOME. The first 1:45 of this video has great footage of both: http://youtu.be/ubW_xFaUtgs

    Warren Buffett says "be greedy when investors are fearful and fearful when investors are greedy".

    This video on Warren Buffett is a must-watch: http://youtu.be/xBfZKjvH9NM

    For our readers' reference only, Benjamin Graham's iconic book can be heard on YouTube here: http://youtu.be/Fc0l8nu85LE

    Peter Lynch: http://youtu.be/_T-uS2GTLZU

    17:13 - market drops are great!

    24:00 - Cheaper stock = a good thing! (exa. Kaiser Inds. Peter Lynch thought it should go from 16 to 50...it did, after taking a pit stop at 3 -- that's a triple the hard way!)

    29:45 - There's always something to worry about

    57:53 - Children/wives = great pickers....he gives advice for bachelors

    Warren Buffett: The first 2:30 = we WANT stocks to drop.
    http://youtu.be/Z4glkcb7HHE

    May 20 3:15 PM | Link | 8 Comments
  • How To Make Four Hundred Times Your Money

    Welcome to this week's PTT Insider.

    "…almost all of my picks are up since issuing "Easy Moves To Double Your Money" on December 12."

    "Of course, some of our picks (like GLUU and PXLW) are off their highs, but both remain up for the year and reported excellent Q1 earnings. GSAT has done one-better -- it hit a 5+ year high yesterday."

    "Our 'Methodology Portfolio' is up 5.5% year-to-date versus the NASDAQ and Russell 2000, which are both flat since that time."

    - Mark Gomes

    HOW TO MAKE FOUR HUNDRED TIMES YOUR MONEY

    On November 27, I issued a "Stock Market Yellow Alert", warning investors that a market top seemed near. It was hard for many to fathom. After all, the market was marching to new highs, seemingly every week. On December 12, I followed that piece up with "Easy Moves To Double Your Money In 12 Months".

    These weren't opinion pieces. They were reports summarizing what my Methodology was telling us to do. You see, I'm not the boss driving my investment decisions - my Methodology is.

    The reason is simple. I am only a human. I have emotions. Thus, I can't be trusted to make smart trading decisions in the heat of the moment.

    This is why I developed my Methodology. Over the course of 25 years, I have incorporated every lesson I have ever learned, ever bit of wisdom my mentors (John Cassarini and Norman Wechsler) have imparted, every observation from the world's best investor (like Peter Lynch and Warren Buffet) and everything I've seen work over the past several decades.

    If you re-read the "Easy Moves" article, you'll see that the portfolio I discussed ended with this:

    "13) Nov 27 - STOCK MARKET YELLOW ALERT!! The stock market looks expensive. A lot of our picks have tripled and we've almost doubled our money this year!! Let's trim our excessive Speculative positions. In this case, we only need to trim the first investment we made in GSAT, bringing us down to a more reasonable investment size. PXLW has become less speculative in recent months, but hasn't gone up a lot, so we'll keep that entire position. That gets our Speculative plays back down to 10%."

    Let's also sell all of our holdings in SPY. That leaves us with about $1M in stocks and $1M in cash. That's right…we started the year with $1M in stocks and now have about $1M in stocks AND $1M in cash. We have doubled our money!!!"

    Here's a detailed view of how our hypothetical portfolio closed out 2013:

    (click to enlarge)

    *Somehow, I mistakenly forgot to include Delia and QADA in the original article. FYI, if I had, QADA's outperformance would have enhanced the results.

    ERROR CORRECTION UPDATE: The date in this chart should have read "Dec 12, 2013", not "Dec 31, 2013". Sorry for any confusion! ~MG

    Since this time, we've added five positions. Two were Speculative (AERO and a pick that only Newsletter members have). The other three were Spring Picks (one of which that only Newsletter members have). For this discussion, I'll only stick with the picks that we've made available to the general public. According to my Methodology, about $20,000 would have been an appropriate amount to put into the Speculative picks (1% of this portfolio into each). About $40,000-60,000 (2-3%) could go into each of the Spring Picks (I used $40,000 in the chart below to be conservative).

    Assuming we simply kept all of the other positions we had on December 12, 2013 (in reality, we graduated STX when it hit $53.82, triple our initiation price), let's see what that would give us today:

    (click to enlarge)

    Take note of the fact that almost all of my picks are up since the December 12 article. As you peruse the performance table, also note that most of my picks are small-cap technology stocks. As CNBC has reminded us every day for the past month, small-cap stocks (especially those focused on technology) have been hammered this year.

    So, how have my picks escaped the carnage?

    It's simple. I've been very careful to pick companies that are truly well-positioned (and not just saying they are). I verify each company's claims with experts and customers, while also investigating the competition to see who has the easiest path to success. Once that process is complete, I do a detailed valuation analysis, which sometimes requires weeks to complete.

    In the end, I only provide you with the best of the best picks.

    Of course, many of my picks are down from their highs. That can't be avoided. In fact, my Methodology talks about protecting your profits when a pick hits the top of its Risk/Reward Chart channel. Both GLUU and PXLW did so in March, before the market correction started.

    I know it may not feel like it, but both stocks remain up for the year. That outperformance should tell you that these are real companies with real value, based on superior potential reward versus their inherent risk. Indeed, both of them validated this claim by reporting excellent Q1 earnings. GSAT has done one-better. That stock hit a 5+ year high yesterday. Whether or not they pan out, investing in companies with this profile is how you make superior returns over time!

    As you can see by the totals in the table above, our "Methodology Portfolio" generated a $118,000 profit in our simulation, year-to-date. That's about 5.5% profit in just five months (13.5% annualized). Compare that to the NASDAQ and Russell 2000, which are flat since that time. If you can make 13% when the market is flat, you can make ~40% when the market has a normal 7% year. This has been my experience going back to 1996.

    That's a big difference…and my sample portfolio doesn't even include juicy short positions like King Digital (NYSE:KING), FireEye (NASDAQ:FEYE), or even the UltraShort Russell 2000 ETF (NYSEARCA:TWM). In a market like this, shorting "bubbly" stocks like KING and FEYE (or even index ETFs that match your portfolio's profile, like TWM) can produce huge profits to offset pullbacks in attractive stocks, like GLUU and ATTU.

    In fact, in a market like this, I do my best to have a good (and relevant) short to protect each of my long positions. By "relevant", I mean that the hedge (short) should be similar to the stock(s) you are protecting. For example, TWM is good hedge for GLUU, because GLUU is in the Russell 2000. KING is also a good hedge for GLUU because it is also a game maker (and overvalued in my opinion).

    For a company like DLIA, I especially want a hedge, because retailers lost a lot of business recently, due to this year's harsh winter. For that one, I picked companies like Cache (NASDAQ:CACH) and GNC (NYSE:GNC), which has worked out great. I've actually made more on my hedges than I have lost on DLIA. Perfect!

    Of course, even with short positions (and option hedges) in place, I've given back a few percentage points of overall profit in the past month, but that's normal Wall Street. Stocks are supposed to go "two steps forward and one step back". Lately, that hasn't been the case, making a lot of inexperienced investor feel like they know what they're doing. However, without years of formal education and experience, it's very difficult to know how to truly value stocks.

    This is why readers subscribe to my service...to get my professional opinion on the true value of various stocks. With that information, making a profit becomes easy.

    To trounce the average investor, all we have to do is to take 2 ½ steps forward and ½ a step back. As you can see from my mock portfolio above, it's easy and very profitable. By learning and adhering to my Methodology, you have a great chance of doing that (if you aren't already).

    Following the Methodology can be tedious and boring, but it has been a major blessing in my life. It has enabled me to generate nearly 40% per year since 1996. That works out to 400 times my money.

    Yes, FOUR-HUNDRED.

    By comparison, the Dow has barely tripled over the same timeframe. This is why I talk so much about it. If I could achieve one goal with PTT, it would be to have every one of you learn to use my Methodology perfectly. If that happens, I believe that all of us can make 400 times our money in the years to come.

    This is a good time to learn. Right now, my Methodology tells me that the market is still too risky to get aggressive. That doesn't mean that the market is going to tank. Rather, I believe the S&P could easily go up 5% from here or down 9% from here. There are other possibilities, but my Methodology focused on the likeliest scenarios…and frankly, I don't like the idea of playing a game where winning means +5% and losing means -9%.

    I'm not the only one who believes this. Ned Davis Research (an organization I greatly respect) built a chart that mapped historical cycles, including:

    1. How stocks trade from season to season (i.e. "sell in May and go away" type of stuff)
    1. The Four-Year Presidential Cycle, because politics play a huge role in economic performance, and therefore stock prices.

    The result suggested that a flat or correcting market can be expected for most of this year, before a resumption of the multi-year uptrend we've been experiencing.

    In the meantime, arm yourself to succeed during rough times as well as the good ones. Read my Methodology often (I update it often!) and please consider adopting it. You saw the results above.

    FOUR HUNDRED TIMES YOUR MONEY.

    I don't blame you if you want to try your own methods, but frankly, I'd rather follow a proven (albeit boring) 40%/year method and spend more time on the beach. If I want excitement, I'll take a few hundred bucks to the casino.

    FYI, PTT Newsletter subscribers have received some new unpublished picks in recent weeks. To upgrade your membership and get our picks early, be sure to sign up here. If the PTT Newsletter is too pricy for your budget, you can earn cash rewards when friends and colleagues subscribe. In fact, one of our members earned $1,800 and an all-expense paid trip to Miami Beach in just two weeks.

    To learn more, check out our Ambassador program.

    Tags: GLUU, PXLW, GSAT, DLIA, QADA, KING, FEYE, CACH, GNC
    May 09 3:14 PM | Link | 6 Comments
  • Divergent: Lions Gate Weekend Updates

    After critics panned Divergent (leading to a 33% Rotten Tomatoes score), hopes for a strong opening weekend fell by the wayside. Shares of Lions Gate (NYSE:LGF) followed suit, dropping 12.3% last week. As we entered the weekend, Wall Street's $50+ million expectations were little more than a pipe dream.

    All the bad news weighed on Divergent like a real-life villain. As a result, the movie entered Saturday with a disappointing $22.8 million total. Some media outlets dropped their expectations as low as $40 million.

    However, the young ladies of American defied mainstream critics. Underground critics did as well. By Saturday night, its Rotten Tomatoes score had risen 8 points to 41% among critics. More importantly, its score among moviegoers had crept up to a massively divergent 81%.

    The rising tide showed through in the Saturday box office numbers -- just shy of $20 million, a heroic number for a flick that was left for dead just 24 hours earlier.

    Suddenly, $50 million appears feasible again. Divergent is Dauntless.

    We'll soon see if the latest Seeking Alpha analysis proves correct...

    Disclosure: I am long LGF.

    Tags: LGF
    Mar 23 3:16 AM | Link | 8 Comments
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