Mark Minervini he is legit or not?

murray t turtle · Dec 6, 2023

Laissez Faire said:
Since you've studied his method for over two years, would you be as kind as to summarize his approach and philosophy in a short paragraph? From what I understand already, he's a long only stock trader trading breakouts (?)?

I agree that it does raise suspicion. On the other hand, if you're a famous Market Wizard from one of Scwager's books and can monetize that, it's essentially risk-free money and arguably much easier money than you'll get by putting your money at risk in the market - even if you know how to trade.

If you did have a unique method and a massive edge, though, you'd be crazy to sell it to the public cheaply. So, the conclusion might be that it's not really that amazing.

I've no idea about his returns, but tend to trust that Jack Schwager did his due diligence. A lot may have happened after that, though, and if I'm not mistaken I believe for example Marty Schwartz said in a later interview that he could no longer trade stock index futures successfully in today's markets.

I do think many of the famous Market Wizards started out trading in very favorable conditions. I believe it was Michael Marcus who said something to the effect that everything was going up and it was virtually impossible not to make money and how there were tons of stories about people getting rich. And how in later periods trading was much more difficult. Richard Dennis, for example, was facing a 50 % drawdown on his publicly managed funds by the time of the interview as his trend following approach got whipsawed in a range bound market. Shortly after the interview he closed down his funds and retired from trading.

On a comparable note, I know several people who got rich (not Market Wizards rich) simply by being invested in the recent bull market and continuing to invest. No brains required. Just buy and hold.

If Minervini requires a bull market to make money, he may not be that much of a wizard after all.

Just my two cheap cents on the subject.
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%%
Good read. Good thing for me I never limited my self to stocks, ETFs or a bull market .
I want to make a general statement about many[ but not all of] Jack Schwager's top traders.
WOULD I care if Larry MINT Hite did not trade in his later years + did more real estate ; no I would not care about that .
Partial disclosure\ I'm reading his book ''THE RULE''

THIS may or may not apply to Mr. Minervini .{ WHY sell real gold?? Good question.
Several reasons LOL= many like US dollars .Same reason, I sell some cash copper.
And that metals business does NOT require bull uptrend market }

ironchef · Dec 7, 2023

Laissez Faire said:
I believe it was Michael Marcus who said something to the effect that everything was going up and it was virtually impossible not to make money and how there were tons of stories about people getting rich. And how in later periods trading was much more difficult.
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Yes, don't confuse wizardry with a bull market.

In 2017-2018 I was printing $ buying call options and thought I was a trading genius. Then it all stopped.

Buying call options wasn't my edge, the bull market was.

Laissez Faire · Dec 8, 2023

ironchef said:
Yes, don't confuse wizardry with a bull market.

In 2017-2018 I was printing $ buying call options and thought I was a trading genius. Then it all stopped.

Buying call options wasn't my edge, the bull market was.
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“Never confuse genius with luck and a bull market.” John C Bogle

That said - even during a strong bull market there are plenty of people who still lose money. I was around when this bull market started post financial crisis and there were plenty of people who were expecting the collapse of the dollar and the US economy due to FED's QE programs when they first started.

They just kept shorting and shorting expecting the system to break down completely.

Same thing with this recent rally. Most people simply couldn't grasp that the market could go this high, this fast. Even though it's done so many times in the past.

ironchef · Dec 8, 2023

Laissez Faire said:
“Never confuse genius with luck and a bull market.” John C Bogle

That said - even during a strong bull market there are plenty of people who still lose money. I was around when this bull market started post financial crisis and there were plenty of people who were expecting the collapse of the dollar and the US economy due to FED's QE programs when they first started.

They just kept shorting and shorting expecting the system to break down completely.

Same thing with this recent rally. Most people simply couldn't grasp that the market could go this high, this fast. Even though it's done so many times in the past.
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Sometimes it is better to be ignorant, some called it beginner's luck.

Also, the hard part of trend following is to have no expectation, no prediction, sometimes no rules and simply follow, hard to do if you are a genius or an expert.

Sprout · Dec 8, 2023

dutchtrader100 said:
I have studied and applied the Minervini method for two years now. Although I like the method, a few things don't add up in my opinion. We are of course blinded by the fact that he won the championship in 1997 and 2021 with returns of 155% and 334.8%.

Even if he won this in a fair way these are still momentary recordings. We never get to see what he performs annually. A successful trading strategy is all about how you perform over the longer term. An important point is when it comes to trading is that there are relatively few perfect bull markets. Often it is a choppy market or a bear market. Even the best traders in history, failed to succeed in a bear market or even went down in a choppy market. His trading strategy works very poorly in a choppy market or bear market. So he would have to perform extremely well in the "good years" to achieve a good average.

Anyway, even if he would be in cash during bear markets and his strategy would be so successful in bull markets or choppy markets, he should be a billionaire with such returns. He clearly isn't. And yes, with his strategy are a limitations in terms of liquidity but even then, he should be a billionaire.

Then I wonder the following. If you have gold in your hands, why are you so busy selling yourself. Selling extremely expensive seminars, promoting books, tweeting daily and being endlessly interviewed by IBD, from which you also receive money because you have become a figurehead. If you compare it to well-known traders like Paul Tudor Jones, they are not involved in this at all. They have to work hard to make good returns. Minervini claims that you should always focus, but he himself is mostly busy selling himself to the world.

Anyway, Minervini once tweeted the results of one of his best traders. Mark Ritchie II and I think those results are closer to the truth. His performance was as follows:

2021 41%
2020 140%
2019 -5%
2018 -6%
2017 75%
2015 -5%
2014 125%
2013 40%
2012 35%
2011 56%

First of all I want to point out the huge gap between a fulltime professional trader like Ritchie II who achieved a 41% return in 2021 and Minervini in the same year realised a return of 334.8%. This difference raises my eyebrows. Again, if you can outperform professional traders with these kind of results, the rest are just amateurs.

But if you analyze these figures, I think you can leave out 2020. In that year even a child could make such returns because of the free money that was given away and all stocks skyrocketed. In that case, you end up with an annual return of 40%. Not bad, but Minervini shared these figures without adding the figures from 2008-2010. And those were pretty depressing years. Would he have made no profit or a little loss in those years. Then the annual return comes out to 28%.

In my view, that 28% is reality and not 100% plus returns who were advertised. Those 28% are good returns when it comes to money, but remember this method is labor intensive. You often have to scan for stocks and analyze fundamentals, take and sell lots of positions, often half of which go wrong. Is it worth all that time and energy? Then wouldn't you be better off investing with Warren Buffett with a little less return?

In the case of Minervini, it seems to me that he made a huge hit in the early years. Then he had averaged returns between 20 to 40 percent. And he can, because he made a good hit in the past, sit out bad markets by not trading. But to make a very good living from it he needs more and that is promoting expensive seminars and selling himself. But returns of 100 percent or more is just nonsense.

In my view, therefore, it is a dream sold to people with normal jobs that they can achieve such returns. You have to do a lot for those 30 percent returns. In which you also spend years trading like in choppy markets, with the end result being no returns or even losses. Reality is that investing with Warren Buffett would be a wiser choice for the average person as it less time consuming and Buffett generated annual returns averaging roughly 22%
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The reality of trading is that you have good months, bad months and pro's evaluate on a quarterly basis. Beginners don't like that. They are much more about "show me the money" and "wen lambo?" A whole industry has emerged to sell the equivalent of picks and shovels to this dream.

longandshort · Dec 8, 2023

Minervini is not legit.

deaddog · Dec 8, 2023

longandshort said:
Minervini is not legit.
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But he does pretty good for someone not legit.
Do you have anything to prove that he is not legit?

longandshort · Dec 8, 2023

deaddog said:
But he does pretty good for someone not legit.
Do you have anything to prove that he is not legit?
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The fact that he sells a private access and motivational service (his latest book lol) instead of running his own capital or a hedge fund tells you all you need to know. His claimed performance should put him in the same league as Chris Rokos, Said Haidar, Dan Sundheim and such, but he's actually closer to the Jordon Belfort's of the world lol. This is not to say that there aren't worthwhile educators at there, but Minervini is clearly a scam:

longandshort · Dec 8, 2023

This video is the greatest example of why people like Minervini are not worth your time:
Mark Minervini explains his ANF trade and how he interpreted price and volume. - YouTube

My favorite part is that he doesn't know that the big volume spikes are earnings dates. All of the major inflection points are being driven by surprises around earnings and he simply doesn't get that. You can do much better than make-believe-mark by filtering for recent stocks who had big beats and just going long (no need to wait for a pullback because the level will likely be higher).

deaddog · Dec 8, 2023

longandshort said:
This video is the greatest example of why people like Minervini are not worth your time:
Mark Minervini explains his ANF trade and how he interpreted price and volume. - YouTube

My favorite part is that he doesn't know that the big volume spikes are earnings dates. All of the major inflection points are being driven by surprises around earnings and he simply doesn't get that. You can do much better than make-believe-mark by filtering for recent stocks who had big beats and just going long (no need to wait for a pullback because the level will likely be higher).
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I have to agree that anyone can show how to trade on the left hand side of the chart.

As for filtering for earnings beats don't you get the same results by filtering for volume spikes?
Who is doing the buying after an earnings beat which causes a volume spike? I'm assumimg it is the institutions but maybe not as their research should have shown that an earnings beat would happen. Is it just us retailers causing the increase in volume?