Systematic Investment Research & Education

"Hello Mr. Minervini. Today you have the ability to do serious damage to yourself. Keep that in mind, now get to work." The morning ritual of the two-time U.S. Investing Champion Mark Minervini (@markminervini) on why a 30% win rate still makes money, why he never bets on a fundamental idea without price confirming it, and the one sin that kills amateurs and pros alike. He won the championship in 1997 and again in 2021, with 334.8% in the $1M+ division per the championship's record, breaking the championship record for most gain in a single year. Separately, Jack Schwager profiled him in Stock Market Wizards for his 5 year run of 33,554% audited gains. "In all the time that I've been doing this, I have not found another way of avoiding a big loss other than taking a small loss." We cover: - The first account, $32,338 from selling his recording studio, and the 33,500% compounded return that Schwager had audited, by his own account - Reward to risk at 2 to 1 minimum: "my batting average can come all the way down into the 30% range and I still don't lose money" - Why losses work geometrically against you: down 50 needs 100, down 90 needs 900 - "The cardinal sin is most traders don't cut their losses. Amateur and pro alike" - "You do not manage money in hindsight. Risk has to be managed in real time" - Why diversification only spreads the risk: "when you get a bear market, everything goes down". Why he starts 25% invested and scales up only on profits - The 6:05 train: how he knows a trade is failing before the stop is hit. "If it's happening on schedule, we stay with the trade" - Why everybody isn't rich if the setup goes back to the 1800s: "Because it ebbs and flows", and why the tough times are boot camp - The year he stood outside a brokerage every day to check quotes, and the Twitter replies that called it a lie - The 7 years he spent losing money before he not only unlocked profitability, but also an insane run of performance. - His rule for gurus: if somebody tells you how to make $10 million, "my first requirement is that they actually made $10 million themselves" - "Dream audaciously. Dream unrealistically. And act independent of the good opinion of others" Thank you @markminervini for coming on Titans of Tomorrow, and for inviting us to your annual Gala. it was a true pleasure. Highlights: 00:00 Intro 03:38 Never bet on fundamentals without confirming price action 12:38 Reward to risk at 2 to 1; a 30% batting average still makes money 14:23 Losses work geometrically against you 15:35 1997: up 155% while almost the entire field went down 19:12 Diversification only spreads the risk; 25% in, then scale 24:26 Every trade comes out of a volatility contraction; why everybody isn't rich 28:06 Almost seven years without making money 32:23 Right half the time; every 50% bear market starts as a 20% correction 38:03 No other way to avoid a big loss than taking a small loss 42:51 The cardinal sin; you do not manage money in hindsight 48:57 The $10 million rule for gurus 55:57 Dream audaciously 58:29 The $32,338 account and the 33,500% audited return 1:01:38 A year standing outside the brokerage 1:05:40 The mirror ritual