Mark Ritchie has won Mark Minervini’s Triple-Digit Challenge.

Apr. 06, 2011 11:14 AM ET
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Contributor Since 2010

Mark Minervini traded his first stock in 1983. He invested in a few hundred shares of Allis Chalmer, a seller of tractors and forklifts. Soon after, Minervini became familiar with the work of Richard Love, author of the book Superpeformance Stocks: An Investment Strategy for the Individual Investor Based on the 4-Year Political Cycle. Love’s work had a profound influence on Minervini’s professional and philosophical views on investing and the formulation of his own investment strategy. By his early thirties, Minervini was at the helm as President of a leading institutional research firm in New York City, advising hedge funds and institutional investors in the U.S., Canada and Latin America. During this period, Minervini also kept a demanding schedule of regular television appearances on CNBC, CNN and Fox News. It was Minervini’s initial intention to simply support himself from his trading profits, but his well-timed investment decisions increased his wealth dramatically each year, as well as the popularity of his opinion. After a decade of studying and trading the U.S. stock market, Minervini founded Quantech Research Group, Inc., an institutional research firm, in 1993. Minervini made available for a fee, to institutional investors, his in-house research based on his methodology Specific Entry Point Analysis® - SEPA®. Clients paid as much as $10,000 per month for Minervini's stock recommendations; his clients list included some of the biggest names on Wall Street. To demonstrate the capabilities of his SEPA® Technology, Minervini entered the 1997 U.S. Investing Championship with his own capital. He won the real-money investment derby with a 155% return for the year, nearly double the results of the next nearest competing money manager. In fact, Jack Schwager wrote in Stock Market Wizards: Interviews with America’s Top Stock Traders: for the period 1994-2000, “Minervini's performance has been nothing short of astounding. His average annual compounded return during the period has been a towering 220 percent. Most traders and money managers would be delighted to have Minervini’s worst year – a 128 percent gain – as their best.” In 1998, Minervini publicly voiced two back-to-back market calls, which shortly after propelled him into the media spotlight. On the August 28, 1998 Cavuto Business Show – Fox News Network, Minervini discussed the statistical similarities between the market then and the market on the Friday before the "Black Monday" crash of 1987, in which the Dow Jones Industrial Average declined 508 points in a single day. The Monday following Minervini’s appearance (the very next trading day), the Dow Jones Industrials fell 512 points. One month later, Minervini turned bullish. In a September 28, 1998 profile titled “Trust the Computer,” Barron’s wrote: “Minervini was still bearish on the market until last week, when he did an about-face and turned raging bull.” He recommended, among other stocks, Yahoo, Broadcom, Network Appliances and Abercrombie & Fitch, all of which went on to score spectacular gains as the stock market entered a new bull phase. Twenty months later, Minervini turned decidedly bearish. On May 30, 2000 on CNN, Minervini said that the NASDAQ had entered a bear market and that the bear market would continue. He explained: “Oracle, EMC, Cisco, Nokia – some of these favorite big-cap NASDAQ stocks that have been holding up quite well – they’re going to give way now, and that’s really going to unsettle investors.” Minervini previously had called for a steep decline in the Internet/dot.com sector on the same network on March 30, 2000. During the March 30 CNN interview, Minervini said: “Many of these (Internet) stocks are going to go down between fifty and as much as eighty percent and some will go the way of Dr. Koop (bankruptcy).” Twenty-eight months later the NASDAQ Composite Index was down sixty-five percent, while Oracle, EMC, Cisco and Nokia were down an average of eighty-three percent. Minervini had avoided one of the most devastating bear market declines in stock market history. He protected his personal portfolio and locked in his gains by going to cash before the decline hit. With the exception of a few well-timed short trades, Minervini sat idle in cash through what was nearly a three-year bear market before returning to the stock market on the long side. Minervini’s achievements led to his recognition in Stock Market Wizards: Interviews with America's Top Stock Traders, by best-selling author Jack Schwager. A chapter in the book is devoted to Mr. Minervini and highlights his investment philosophy and money management approach. Schwager noted that Minervini's exceptional returns tell "only half the story." Mr. Schwager wrote: "Amazingly, Minervini achieved his lofty gains while keeping his risk very low: He had only one down quarter – barely – a loss of a fraction of 1 percent.”
Mark Ritchie II has won Mark Minervini’s Triple-Digit Challenge.

At the conclusion of the 2010 Master Trader Program, Mark Minervini threw down the gauntlet and challenged his attendees. He said: “Every one of you in this room here today now has the tools to produce a 100% return in your trading accounts within 12-months. The first one of you that reaches this goal can be a guest in my home and come and trade side-by-side with me for a day. All expenses for the trip will be paid by me.”

Mark Ritchie II from the Chicago area conquered the challenge. Utilizing the SEPA® techniques he learned during the 2-day Master Trader Program last October, Mark turned his $25,000 trading account into more than $50,000 in just 5-months.

Mark Ritchie II with Mark Minervini


Wait, there’s more!!!

Two days after we confirmed Mark Ritchie’s results, a second Master Trader Program alumnus reached the 100% mark; Matt G of Connecticut traded his $850,000 account to a triple-digit gain.

Matt Glascoff with Mark Minervini

CONGRATULATIONS TO THE BOTH OF YOU…

GREAT JOB!

WINNER MARK RITCHIE'S STATS AND COMMENTS

Name: Mark Ritchie II
Account Size: $25,000
Period: October 20, 2010 – April 4, 2011
Use of leverage: Yes, as much as standard Reg-T margin would allow for, roughly 2:1
# stocks traded: 139
Position Sizing: Aprox. 25%
Net reward/risk ratio: 2.42:1
% Trades Profitable: 43%
Quotes: Interactive Brokers, TradeStation
News: Interactive Brokers, Marketwatch.com, Yahoo Finance

Click to enlarge image

How trading ideas were generated:

Used basic screens which I derived from information learned from Mark Minervini's Master Trader Program, at Minervini Private Access, and Mark’s blog; earnings, RS, Mark's Trend Template and things he has discussed at length.

Technical entry criteria:

Only entered if I had a visual stop on the chart I was comfortable with, the smaller the better, usually in the mid single digits, would look for charts with tightness on the right side with accompanying patterns discussed at Master Trader Program and in his workbook, i.e. cup w/ handles, power plays, 3C's and the like. Once I had determined tradable pivots I would enter upon subsequent breakouts.

Fundamental criteria:

Tried to look for stocks with best earnings, although good technicals would sometimes override fundamental criteria, but basically companies with accelerating earnings and sales, usually 25% or higher

Criteria for taking profits:

This was the toughest part but usually looked at current gain to average gain and where the chart looked at a given period, i.e. if the stock was above my average gain and looked extended I would look to take profits, I would often take profits into weakness when stocks would take out previous significant lows on their respective charts. I also used some of the moving average rules discussed for selling in the Master Trader Program workbook.

Criteria for loss protection:

Get out quickly whenever the stock hit my predetermined loss point, usually the point at which the chart started to break down. When the stock hit my pre-determined loss point I would get out ASAP!

Additional comments:

In short I can say that all the performance is a function of what I learned at the Master Trader Program with the exception of the money management portion, as I have always traded strictly based on the #'s of my own trading, avg. W/L, win rate, etc. So once I became more & more comfortable that I could maintain an edge that was mathematically deserving of a 25% position size I started trading larger and more aggressive. That said on the money management side all of the stock specific criteria as far as fundamental and technical selection I would say came purely from Mark's teaching. I should also add that in no way do I feel that this period was some of my best trading as I made many mistakes and I believe that I am capable of much better overall trading the more I continue to put into practice what I've learned. There's not much else to add other than the guy is as good a teacher as he is a trader!
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