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Never Sell Outlier Stocks

June 24, 2021 //  by Lucas Downey//  12 Comments

Stocks go up. Stocks go down.

Outlier stocks do too, but they make investors rich. That’s why we say: never sell outlier stocks.

never sell outlier stocks

To reinforce this, we’re showcasing our weekly stock pick performance going back to 2018. Full warning: if you’re allergic to juice – look away!

But, before we do our victory lap, let’s check in on the market.

Many investors worry about all kinds of things right now: high inflation, rising interest rates, and the Chinese crackdown on cryptocurrencies.

Many studies show that excessive worrying can lead to high anxiety, which can trigger physical illness.

So, while those headlines are legitimate concerns, stop worrying. It’s not good for you. And the simple fact is our data continues to clearly say:  stay long.

Big Money Index Says To Stay Bullish

It’s summertime. That means trading volumes are lighter as Wall Streeters take vacations.

This quiet action can also be seen in the Big Money Index:

big money index

As you see, the BMI is hovering right near 75%. Above 80% is overbought…i.e. the red line. Right now, we’re not expecting to break into the red zone for another couple of weeks. And even when we do, we can stay overbought for quite a while.

For us that means  stay bullish. But, let’s take a deeper dive in the data because last Friday’s price action freaked investors out.

Friday’s selloff was big. In fact, it was the single largest selling day in our data since October 28th, 2020.

Below you can see how nasty the selloff really was from a data standpoint in our Big Money Stock Buys & Sells chart:

quad witching largest selling day for stocks in 2021

But, as ugly as that red day was, we didn’t change our bullish tune. Here’s why.

Friday was quadruple witching, which means 4 expirations happened for markets: stock options, stock index futures, stock index options, and single stock futures. These days are always huge volume days.

So why were we still bullish through that mess?

We looked back at how markets perform on quad witching days. Since 2015, the S&P 500 (SPY ETF) is almost always red – 88% of the time:

quad witching days are usually red

Looking through this lens, Friday’s action was totally normal. So, to us, it says ignore the event as it was expected.

Casting out the one day of selling, chalking it up to quad witching, allows us to take in the bigger picture. Buying is on the upswing, growth is returning to favor, and the BMI is trending higher. That means we stay bullish.

Focusing on the day-by-day action in markets will make your head spin anyway.

We prefer to follow the Big Money for the market’s next moves. As we’ve been highlighting for weeks, growth stocks are ramping. And that’s incredibly bullish.

Eventually the data will change – it always does. But that’s not today – so stop worrying- it’s bad for you.

Now for the fun part!

Remember earlier when I told you we never sell outlier stocks? I’ll show you why.

Never Sell Outlier Stocks

Each week in our research, we highlight one stock. They come from our awesome Top 20 list.

These are the stocks with great fundamentals getting bought by Big Money. They’re the stocks that have growing sales, earnings, and profits. Those are hallmark traits of outlier stocks.

This morning I went back to see how our weekly picks have done versus the S&P 500 (SPY ETF). The results screamed: “never seller outlier stocks!”

Let’s begin with 2021. Markets, on fire like now, are hard to beat.  But did our weekly stocks beat the market?

YUP.

Here we see the average performance of each weekly stock pick held until yesterday’s close compared with buying the SPY ETF over the same period.

Our stocks beat the SPY by an average of 45%!

mapsignals performance 2021

But maybe we just got lucky- right? Well, let’s do this same process for 2020 which of course includes the worst stock crash in recent memory. Below is the average performance of each weekly stock pick in 2020, held until yesterday’s close:

mapsignals performance 2020

Still solid!

Here’s where it gets interesting. Outlier stocks can make monster gains. Let’s keep going back to 2019 and 2018. Remember, the performance is as if you held until yesterday’s close.

Here’s 2019:

mapsignals performance 2019

Here’s 2018:

mapsignals performance 2018

Those are some sick performance stats: crushing the S&P 500 4 years in a row.

Now I realize that holding so many stocks for such a long period may not be practical for most investors. But it does clearly demonstrate our mantra: never sell outlier stocks!

Let’s bring this all home.

Here’s the bottom line: Our data tells us stocks have further upside. That’s great news. But the bigger message is what outlier stocks can do for your portfolio. You only need a few to make a huge impact on performance.

Look, it’s important to know what’s going on with current events and the market. We’re in extreme times. But, worrying about it leads to health issues.

And our solution to worry is to just relax with some outlier stocks. That’s because it’s hard to beat outliers over the long-term.

History proves it. And we’re on a mission to bring them to our readers.

While we can never give personalized advice, I’ll tell you what we learned a long time ago. We never sell outlier stocks. And after looking above, we’re glad we held!

And as a bonus, our latest video is out: Best ETFs for July 2021. If you want to learn more about our process, watch Jason in action!

Lucas Downey
Lucas Downey

Lucas is co-founder of MAPsignals. His full bio can be found here.
Prior to MAP, he was Head of ETF Sales at Cantor Fitzgerald & SVP of Derivatives at Jefferies, LLC.

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Category: All, Big Money Insights Weekly, Performance

Previous Post: «best etfs for july 2021 Best ETFs for July 2021
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Reader Interactions

Comments

  1. Vlad

    June 24, 2021 at 9:59 am

    Talk talk talk; never sell outlier stocks …
    And we’re on a mission to bring them to our readers…
    where are they?

    Reply
    • MAPsignals Staff

      June 24, 2021 at 10:03 am

      Hey Vlad –

      Our subscribers have full access to all of our content weekly. So, yes we do talk the talk. Let us know if you’d like to subscribe!

      Reply
      • MAPsignals Staff

        June 24, 2021 at 10:15 am

        Here’s the link to subscribe if you’re interested, Vlad: http://www.mapsignals.com/get-map

        Reply
      • kap

        June 24, 2021 at 11:24 am

        Unsolicited comment: I have been a subscriber for some months now and I can confirm that the Big Money Index (BMI) in combination with the recommended stocks has made me good money. It is a system that works. Not sure how things will look when the inevitable collapse of the bubble arrives (might be next week, might be in 10 years). But a steeply falling BMI will tell us that trouble is ahead. I personally prefer to exit all positions and buy back outlier stocks later, when the BMI points up again.

        Reply
        • JOHN

          June 24, 2021 at 2:09 pm

          Bravo. Use Map for in and out is a good strategy. Holding outliers forever may not.

          Vlad has a good point. Please don’t keep talking and have us search your data.. Please give us a summarized table with outlier names and performance history (all in one chart). It will help us buy outliers and help you gain more subscribers.

          Thanks.

          Reply
          • MAPsignals Staff

            June 24, 2021 at 2:58 pm

            Hey John –

            Outliers are only a statistical anomaly. They are the best stocks that we find with Big Money. Every single week we have Top 20 report for platinum members. We list very clearly the names on the list that are outliers.

            Also, check out the Member Updates video from 4-16-21 https://mapsignals.com/member-updates/. Luke went over the MAP 50 in detail.

            Check the monthly MAP 50 reports. That’s where our best names are found.

  2. Brian

    June 24, 2021 at 3:11 pm

    I am a new client and have been wondering if you never sell your holdings, how do you free up capital to take on new positions. I’m sure you do take stocks/ETF’s out of your portfolio but I was wondering what your exit rules are.

    Reply
    • MAPsignals Staff

      June 24, 2021 at 3:17 pm

      Great question!

      Each month we are saving money to buy stocks. Think of it like the vacation fund that families save for Disney. We do the same with stocks.

      We tend to deploy that capital during pullbacks. This is how we do our personal accounts. Obviously, we can’t advise this for others! It’s almost like dollar cost averaging, except we let the money pile up for when a deal comes along…I think Warren Buffett is the king of this type of strategy!

      Reply
  3. John too

    June 25, 2021 at 1:50 pm

    The response to John (who didn’t seem to be a subscriber) to “check out the Member Updates video from 4-16-21 https://mapsignals.com/member-updates/. Luke went over the MAP 50 in detail.” that isn’t accessible to non-members isn’t a lot of help.
    What do you define as an outlier? Amazon (recently have been throwing out some 20 yr old Barron’s that never missed an opportunity to bash it has been amusing), Tesla, Apple, NVDA, NFLX? Those are easy if you have a time machine.
    More recently MRNA?
    Good luck with never selling, even Warren does.

    Reply
    • MAPsignals Staff

      June 26, 2021 at 9:45 am

      John too.
      Thanks for writing in. We give away lots of insights and general information we feel is helpful – for free. We also offer paid subscriptions to those who want to go deeper. Sometimes we reference members only material – especially when addressing a member’s confusion or issue. I understand that not everyone in this community can afford or chooses to be a member at the paid levels. For those who are interested in our outlier stocks and which ones we showcase to paid members, there’s a clear and easy path to do so. For those who want to hang out and enjoy our topics and even spur debate for free- we love having you.
      As far as your specific question:
      Since we opened our doors in 2014: NFLX was profiled 30 times on Top 20 Buy report, NVDA 58x, AMZN 32x, AAPL 12x, TSLA 3x.

      As weekly profiles: NFLX 12/8/14, NVDA 11/24/19, AMZN 11/3/14, 10/14/18

      Feel free to look those up on charts and tell us it wasn’t helpful to our subscribers. And those are just the ones you mentioned.
      We profile new stocks constantly. The great news is you don’t need a time machine when you can participate in new outliers early on. And time machines are probably way more expensive anyway.

      Reply
  4. JOHN

    September 15, 2021 at 2:29 pm

    Dear MAP:

    I believe you posted the performance chart once for your outlier stocks. Did you provide updates to the charts? Where can I find the charts? Thanks. Subscriber John S

    Reply
    • MAPsignals Staff

      September 15, 2021 at 3:12 pm

      Hey John – which chart are you meaning? Was it for a basket return?

      Reply

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mapsignals
mapsignals avatar; MAPsignals @mapsignals ·
13h 1622987016957820928

One of my favorite #dividend #stocks having a day - Skyworks Solutions $SWKS - owned it for years

The $2B buyback is pretty significant given the market cap is sub $19B

#Semiconductors continue to see major inflows

Reply on Twitter 1622987016957820928 Retweet on Twitter 1622987016957820928 0 Like on Twitter 1622987016957820928 2 Twitter 1622987016957820928
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