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%
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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