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Bonus Weekend Post: Bullpen Of Contenders Is Integral To ROTY Strategy

Readers and those who follow the ROTY series have probably noticed that the Contenders List continues to grow and we have added several new stocks/ideas waiting in the wings. Soon I will start taking some off, leaving only those with near term catalysts.

The current list of ROTY holdings in the 10 stock model account includes a few names, such as Zogenix and Motif Bio, that we expect to profit (hopefully) on in the near term and then move on.

It's vitally important to have great ideas/stocks waiting in the wings to be able to replace those that have either worked out well or losers that we cut. There are many great stories in the Contenders List, and so I will have to choose the 2 best to replace holdings that we sell.  Best in terms of:

   Risk/reward balance

   Near term catalysts to profit on

   Current price action/strength is what we are looking for while not having stocks run up without us

Likewise a couple ROTY ideas could easily get bought out and I can think of one or two that could always go against us in the near term.  If that happens, we still need to be ready to move on, staying unemotional. 

Equally as important, if I see two stocks of more or less equal conviction, one in the ROTY model account and one in Contenders List, but the one on the Contenders List is starting to show strong price action/relative strength while the stock in the first account is showing little institutional interest/buying, I will switch them out at a moment´s notice if the trend continues.  Let the market dictate to you which stocks will be profitable- stay humble and don´t get married to your stocks.

Stick to your thesis and plan, but be flexible enough to make changes as needed!

Hope that the above, my ramblings, in the end made sense.



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