Follow This Trading Rule or You'll Have Problems... -- with David Moadel
hello friends and welcome to looking at the markets with David Modell in this
video I'm going to tell you about a crucial stock trading or investing rule
that I follow and that I've been pounding the table about I want people
to know about this because it's so important I see so many people making a
crucial mistake and I don't want you to make it alright and before I get started
in the description below this video if you see some links there there will be
seven different links to free stock reports with some in economic and
financial reports that I have co-authored I helped to write them and
research them so I know they're all really good and they're all free you can
download one or several or all seven of them and all you have to do is just
click on those links in the description below this video and we'll send them out
to you for free no obligation and they're not going to sell you you know
they're not going to try to send you a bunch of junk or anything like that all
right so all you have to do is click on the links in the description below this
video put in your email address hit that download now' button and they'll send
them out right to you download as many as you want alright so here is Kraft
Heinz company this is a perfect example of what I'm talking about as far as the
rules that I follow the three-day waiting rule the three-day rule you
gotta wait three days this is what can happen and often times does happen and
it's up to you to make the decision I cannot tell you what to do or what not
to do you have to decide what you're going to do I was looking at Kraft Heinz
Company because it went down so much it just plunged and then yeah and this is a
company that's been around for many years they have products in stores all
across the country and you know around the world really the brand name
recognition is huge so I thought okay and Warren Buffett owns this so I
thought ok maybe this is an opportunity but then I said to myself wait three day
rule whenever a stock really plunges in one day like Kraft Heinz did a few days
ago I wait at least three trading days not you know weekends don't count
holidays don't count three trading days Monday through Friday when
the markets open before I even consider buying it and even then I might not buy
it that's before I even start to consider maybe should I buy it or should
I not okay and so this is what happened or could happen sometimes if you don't
follow that rule it went down it went down around 27% in one day I remember
that and I was telling people on social media three day rule I hope people
listened then it went down and then down and down today it's down again it's been
going down between two and three percent three days in a row this is a perfect
example and the markets open it could still go down more it's not looking good
all right what exactly happened if you're curious this is barons calm well
Kraft Heinz because it went down so much in one day what do the article writers
and what do the analysts do you think they upgrade it after 27% decline no
most article writers a lot of them hopefully not me okay but other article
writers tend to be an analysts tend to be a lagging indicator they'll kick a
man when he's down so to speak all right they'll beat up on a stock after it
already got beaten up so and that happens in the coming days or it tends
to happen in the coming days here it is this is today three days
later Kraft Heinz stock just can't escape the downgrades
all right and it also talks about exactly what happened in the first place
why why did it go down 27% or so approximately that much in one day
crafts fourth quarter results and guidance disappointed the company also
cut its dividend that's not a good sign and took a 115 point four billion asset
right down related to Kraft and Oscar Meyer brands and disclosed that the SEC
has been investigating its procurement divisions accounting practices since
October so what happened well it says right here many Wall Street analysts
downgrade the stock that same day and the trend continued this week with
Bernstein cutting its rating on Kraft Monday to market perform from outperform
so that's and then what's new our Argos is Chris Grazia
downgraded craft on Tuesday all right and they're probably you're gonna have a
you know maybe even some more but most of them will happen either that day or
the next few days okay but you might not even want to buy it
now because there might be more coming you might want to me wait more than
three days you might want to wait a week two weeks whatever it is until you feel
comfortable jumping in all right so don't make that mistake of just buying
something because it's you know it's down a lot even if it's a company that
Warren Buffett owns even if it's a company that's been around for a very
long time has a lot of well-known name brands and stores all over the place
Warren Buffett owns it that's all fine and good but three day rule folks you
want another example here's another one stamps.com it went down over 50% in one
day all right and then let's take a look and this is a company that went up for a
long time it had a multi-year run up from 2014 all the way to 2018 last year
in the summer and then it went down and then it really went down because they it
was related to losing excuse me they're a United States Postal Service USPS
exclusive relationship there so stamps.com
if you check out the five-day on Yahoo Finance BAM down Wow look at that from
well it was in the almost $200 per share range down to $87 more than a 50% drop
in one day and today a feud and it did go up a little bit but then a few days
later look at this down five percent in one day all right so who knows what's
gonna happen excuse me what's gonna happen over the
coming days I don't want to deal with 5% down days in a stock that's not a normal
price movement that's volatility and so I would rather just wait okay could it
you know when the stock moves I've noticed that the stock moves have been
pretty wild on this one in the last few days I don't usually like to deal with
that maybe if I'm selling options I like volatility but you know I like to wait
if I'm going too stock shares went away until the
volatility usually has calmed down somewhat this is not a sign of calming
down this is a sign of possible trouble ahead
I don't even want to deal with this three-day rule folks I know you could
lose patience sometimes you want to jump in you've been waiting for a long time
for these opportunities if you think it's a good company but if you've been
waiting months or even years for stock to go down it won't kill you to wait a
few more days just to take a second look at it all right so I hope I'm saving you
a lot of problems in the future with this all right so if you like this video
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they're not going to try to you know spam you with a bunch of junk or
anything like that alright so hey thanks a lot I really
appreciate it I'll talk to you real soon thanks a lot