Stocktwits: A stock board you can trust?

One of the largest groups of retail investors can be found on Stocktwits.com. Stocktwits was also one of the original creators of using $TICKER “Cashtags” which has become very popular in the investing community. Reddit has also become a popular stock board but today we are going to discuss the pros and cons of spending time on Stocktwits.  

With any online community you need to be careful about who you listen to and the motives behind what they post. Stocktwits is no different. After spending a few minutes on the site, you can find users who are very mad about their stock picks and spam the boards. You can also find stock pumpers who are looking to shout how wonderful their stock is to the world. There are even profiles that will use profanity and aggressively attack other investors. Our advice is to take everything with a grain of salt. If you are looking for stock advice, make sure it comes from reputable sources and not a profile that was created 3 days ago. There are many better reputable sources with stock recommendations that you can trust. 

Now Stocktwits can still be useful. Here at Seabird Stocks, we use Stocktwits to get a reading on how investors are feeling about a particular stock. You can easily see how many profiles are “watching” a particular stock giving you an idea of how popular it is with the retail world. You can also get a sentiment on how users feel about a stock. If every post you come across is negative, you can assume the stock is going through a rough patch and might be a good entry price if the company is still growing and making profits. Another benefit is that Stocktwits makes it easy to follow stocks and have an easy to create watchlist to keep up with daily stock changes. 

All said, Stocktwits can be another tool in your investing toolbox but make sure not to place too much important on the posts you are seeing. Follow your due diligence and make sure to do research outside the boards. If anything, you can get some great entertainment while waiting for your stocks to go up. 

Be Smart, Be Safe, and Trade! 

Seabird Stocks: When to Take Profits?

Stock boards are full of many success stories where other traders post 100-200% gains on their stock picks. These stories can get us excited about making a lot of money on risky stocks. These stories are not normal, and it is important to remember to take profits when we get them. On top of this, there is no proof that these stories are even true. Our goal here at Seabird Stocks is to make money and we sell our stocks when we see at least 15-25% profit. 

While 15-25% profits on stocks may seem small, it is important to remember that if you make this percentage on all your stock, you are almost double the yearly return of major indexes. Following this plan has allowed us to obtain at least a 50% profit year over year.

Taking profits at 15-25% also helps to make sure that your gains are not erased. Many stocks can be volatile and if you do not sell then the stock when you see profit you risk losing your well-earned profit. Investors in GameStop (GME) and AMC Entertainment Holdings Inc (AMC) that didn’t sell at highs know this issue very well. If you do get lucky and see overnight success in a stock make sure to obtain those gains.

Even if you don’t prescribe to taking profits at 15-25%, the takeaway is to make profits when you can. Anytime you can book a profit you should be proud that your portfolio is growing. So, stand tall and enjoy your profit! 

Be Smart, Be Safe, and Trade! 

Treasures Among Trash: Finding Top Stock Picks Using Yahoo Losers

One of our favorite places to find stocks to purchase is probably one of the last places you would think of looking. Yahoo Finance curates a list of stocks that have the highest percentage of negative change from the day before. This list is called “Day Losers” as is our go-to place for finding value stocks that will produce short- and longer-term gains. To filter most of the penny stocks and questionable choices we make sure to include a filter that only shows Mid Cap and Large Cap and Mega Cap and has a volume greater than 20000. 

Of course, not every stock on the list is a winner, but it is a great place to start as the list shows you the 52-week high and lows for all the stocks so you can easily calculate how much farther it could drop and how much room a stock has to grow. You can also click into each stock to see PE, Revenue, Market Cap and profits. These factors combined produce some impressive results. One example is Anheuser-Busch InBev SA/NV (BUD) which led to 35% gains in a few weeks. 

Recently the list has been dominated by GameStop, AMC Entertainment Holdings, Inc. and other stocks that are coming off their highs but with enough searching you will find the gems. We tend to stay away from stocks on the list that have are losing share price due to not creating a profit or are currently going through dilution. So, the next time you have the time and want to diversify your portfolio, make sure to take a dive in the daily losers and discover some stocks you can buy low and sell high. 

Be Smart, Be Safe, and Trade! 

Which is Better: Picking your own stocks or using ETFs?

We hear this question often and the best answer is it depends. Here at Seabird Stocks, we use both. About 75% of our portfolio sits in our active investing fund which allows for us to pick our own stocks depending on our due diligence for each stock. The remaining 25% of our funds are put into no fee Exchange Traded Funds (ETFs). Utilizing both investment vehicles allows for greater diversification and less stress during tough economic times. 

As retail investors, picking stocks is in our blood. We choose individual stocks that we believe will beat the overall market’s growth. There is no denying that finding the right stocks to buy at the right time takes a lot of time and patience. With practice, we can improve our investing style to buy and sell stocks where we can make a profit. However, risk is also involved. If we invest in a stock that goes through a rough patch and our stop limit kicks in, we can easily lose money.  

Investing in ETFs as well as picking stocks can help reduce loss of capital in the case that a few of your selected stocks do not follow your predictions. ETF’s can be your stabilizer as the NASDAQ and Russell 2000 aren’t as volatile as individual stocks and will allow you to diversify your holdings. This means that even on a down day with your stock picks, you can see profits from your ETFs. Think of it as peace of mind and gives your money a way to grow without you having to manage all aspects of where it gets invested. Most ETFs nowadays do not carry a fee which should help convince you to place a part of your portfolio in them. 

Be Smart, Be Safe, and Trade! 

What is a Retail Investor?

Retail investors are non-professional individual investors like you and me. Generally, this means that retail investors do not have licenses or certifications that allow us to invest other people’s money within stocks, securities, and bonds. We use a variety of investing tools like Robinhood, Acorns, Sofi Invest, or larger companies like Fidelity and E*TRADE to trade our own money and try to get a piece of the pie. 

Retail trader’s goals are just as diverse as our investing styles. Some of us are looking to make a career as traders while some are looking for a way to invest our money for the long term to be safe in retirement. Our goals also define whether we focus on short-term or long-term investing. In this way there is no right or wrong way to be a retail investor as long as we book profits on our trades. 

One of the benefits of being a retail trader is there is no requirement to have a certain amount of capital. You can be a retail investor with as little as $100 or up to hundreds of thousands of dollars. It is our versatility and number that makes us a force to be reckoned with as seen by the massive jump of GameStop (GME) stock in 2021. 

 There is no wrong time to become a retail investor. If you have money that you can afford to put into the stock market, it can be an extremely rewarding and stimulating hobby. You will need determination and an open mind to become a successful retail investor and always do your due diligence before buying stocks. Hopefully, Seabird Stocks has become be one place for you to learn and grow your investing passion. 

If you are new to the world of retail investing, dip your toes in and get a feel for your favorite stocks. Start small and with enough determination, grit, and savviness you might surprise yourself with hefty profits! If you are an expert, make sure to help those starting out as we are a great and growing community. 

Be Smart, Be Safe, and Trade! 

Value Dividend Investing; Good for Short and Long Term

I have been asked many times what is my investing strategy? The best way I can describe it is “Value Dividend Investing.”  To break it down it means finding high-yield dividend stocks and buying them when they are near their 1-year and even better, 5-year lows. This way you get the best of both worlds. When buying these dividend companies at their lowest there is a good chance their stock price will increase in the short term and if they continue to go down you can keep buying more to average down and still make money when stock dividends are given. 

Take Enterprise Products Partners LP (EPD) for example. From February 2020 to March 2020 their stock price tumbled from $26 to $12. Throughout this time Seabird Stocks maintained that this stock was a massive buy for many reasons. The first is that EPD has been around since 1998. The second reason is that EPD gives at least a 6.8% dividend every year. For anyone not familiar with stock dividends this is on the high side. While the dividend could have been in jeopardy during the Covid-19 crisis, EPD has been solid in paying a dividend almost every year. Another plus is that the company has high insider ownership around 38% and the executives are highly active in buying the company’s stock. 

Given these facts, buying EPD stock in March presents the perfect opportunity for Value Dividend Investing. Minimal risk, high dividend, and a lot of room for the stock to go back to its February 2020 level. We think its time to embrace Value Dividend Investing regardless of whether you are a short term or long-term investor. 

Be Smart, Be Safe, and Trade!

Have Hedge Funds Been Stopped by The GameStop Revolution of 2021?

As we have seen last week, retail investors can exercise quite a bit of power in the broader market when they band together. In the past 3 weeks GameStop stock has risen over 1,600 percent driven by the operation of a multitude of retail investors pushing up the stock price to trigger a massive short covering by hedge funds. The ultimate question is have hedge funds been pushed out of the stock never to return or is this a temporary blip? 

Let us start by taking a quick look at how hedge funds have been doing in the stock market. In truth, hedge funds haven’t been doing that well compared to gains shown by the S&P. Hedge funds have underperformed the S&P 500 every year since 2009. Hedge funds are also facing increasing competition from automated investing companies placing investments in exchange-traded funds (ETFs). Even with these headwinds there is no denying the power that hedge funds have due to the massive amount of wealth they have at their disposal to affect individual stocks and the global stock market. 

My belief is that in the end hedge funds will win and the main reason is the amount of wealth they have at their disposal. While some hedge funds have taken a beating after covering their short positions in stocks like GameStop (GME), Bed Bath and Beyond (BBBY), and AMC Entertainment (AMC), most have the ability to ride out this rough patch. Yes, some hedge funds like Melvin Capital may go under but there will be many more hedge funds to take their place.  

Most retail investors, however, do not have the amount of capital needed to survive if the stocks quickly plummet and stay down. Losing a couple of million dollars can be a drop in the bucket to large hedge funds but a retail investor losing $5,000 could mean the difference between paying rent or not. There is a saying that the house always wins and in this case the house is the hedge funds. 

For this reason, Seabird Stocks has not jumped on the bandwagon and invested in these hot stocks and is waiting for the dust to settle. Congratulations to everyone that has booked profit on the dramatic rise of stocks like GameStop but do not expect the hedge funds to take this revolution lying down.  

Be Smart, Be Safe, and Trade! 

Failing Quickly and Smartly Makes A Successful Investor

All retail investors have made bad calls and mistakes. I would even go so far to say that all investing experts and professionals have made bad calls from time to time. Learning from these mistakes and discovering how to invest better is how retail investors can grow and earn money.  

One mistake I have personally made is investing in Neovasc Inc. (NVCN), a specialty medical device company that develops, manufactures, and markets medical devices. In 2016 Neovasc was a promising company that had intellectual property that could make it a leader in the treatment of mitral valve disease which is a multibillion-dollar business. If they could bring their product to market the stock would shoot up and lead to massive stock price gains. Unfortunately, the medical device industry is ruthless and NVCN lost a major legal case resulting in hefty fines and forced profit sharing. The result, the stock lost 90% of its share price in two months. This led to my largest loss ever. While it was costly, the lessons this loss taught me were worth it. 

The first lesson is taking risks and making a bet on a company’s chances of succussing are sometimes worth it and if the risk is high, never place a substantial part of your portfolio into these stocks. This will reduce your downsides and ensure you have the capital to live another day. Another lesson is that when news is released that is bad enough to take down the company you invested in, make sure to cut your losses early rather than doubling down. Finally, this mistake taught me to focus on companies with profits as they can better weather negative news and will not need to dilute the stock price and split their stock. 

Be Smart, Be Safe, and Trade!