Navigating the Coronavirus-related Market Volatility

[David Settle]

Market Scholars,

This has been a crazy 7 weeks. We’ve seen a record drop from all-time highs (35% in just four weeks) and a subsequent 25% rally off the lows. The VIX spiked to its own historic high and has come down to a “low” that itself would be the highest level since August 2011.

Needless to say, this has been a time in the stock market that is rare. We haven’t seen anything quite like this since except maybe two other times in history – 1987 and 1929.

We’ve been teaching classes for over 100 weeks now. How has your Market Scholars education helped you navigate this historic volatility?

Let us know by replying to this thread below.

David

• This topic was modified 3 years by David Settle.

[Linda Albers]

From top to bottom, my portfolio was down just 16.5 percent. I attribute that to the quality of my holdings and advance downside preparation during several weeks before the market collapse. Daily coaching from Market Scholars deserves a lot of credit for making that happen.

[Tom Christopher]

I’ve learned a lot about option trading since joining Market Scholars. I had always traded options, but now, thanks to many MS sessions and classes, I am much better and focused on define risk trades and limiting losses. Usually, I’m doing very long LEAP CALLs on sectors like 5G technology etc AMT, CCI e.g.).., some covered calls on long stocks, and lots of vertical spreads. With the increased volatility, I’ve changed to selling PUTs on bullish stocks with weekly options (selling on Tuesday or Wednesdays usually, because the premiums have been so high (doing this on stocks I wouldn’t mind owning (especially those with good dividends)). I am also now kind of day trading using SQQQ or TQQQ to capture maybe a thousand $ a day on good days with streaks, as we have had some wild up and downs. My portfolio has gone up 19% from the day of the first drop. One thing I did, which finally paid off big time, was to always have (I’ve done this for several years now) perhaps six stocks in my portfolio in sectors that suffered the most in the Great Recession. I bought DOTM cheap PUTs on those. E.g., RCL, CCL, UAL, XLE, MAR, NKE, etc..usuually 6-8 months out, but always replacing one when it expired (or sold it for profit). Usually choosing a strike somewhat above the 2009 lows.

[Eugene Chen]

through these challenging times, Market Scholars has helped me tremendously in staying calm even though there have been very hairy times. i have benefited the most Technical Analysis, Market outlook live videos, DGI class, Options for Long Term investors.

Dave Settle has been great with this chart reading, and his analysis of where we are going probability wise. like he often says, its not 100% or 0%. its all probabilities of what will happen going forward.

with Brandon, he is able to help us locate the best DGI stocks at amazing buys. these stocks may all fall more (we dont buy at the very bottom), but our confidence is that these are generational buys that will have awesome gains in the next 1,5,10 years.

for me, they complement each other well. Dave with his chart reading, and Brandon with his long term investor attitude in building up a great DGI portfolio that you can sleep well at night.

without these guys, its easy to panic and sell at the worst time possible and curl up in a ball in the corner.

• This reply was modified 3 years by David Settle.
• This reply was modified 3 years by Eugene Chen.
• This reply was modified 3 years by Eugene Chen.
• This reply was modified 3 years by Eugene Chen.

[Luc Dehouwer]

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[Ken Ware]

I have been with Market Scholars from their beginning days. My investment strategy since that time has been focused on Dividend Growth stocks and my portfolio is heavily invested in stocks selected during Brandon’s DGI class. In February, when stocks were at all time highs, I took the advice given at Market Scholars and took some risk off the table. The positions I closed were non-DGI positions and I had cash going into this downturn. Unfortunately, I got back into the market with most of my cash too soon, but, live and learn I am better off than I could have been.

In general my DGI stocks have faired better than the market, dropping less and rebounding quicker. Although down from their highs, some of my DGI sectors are in a very good place. Specifically, dividend stocks in consumer staples, consumer discretionary, Information technology, and health care all have recorded double digit growth since their purchase despite the recent market volatility (I’d rather not talk about energy).

The future looks good. I plan to stay at home, watch the market and follow Market Scholars.

[Gerry Keller]

I’ve been selling puts on good stocks that I would not mind owning at those prices for long, long term. When market went way down, a lot of them expired out of money, but I had like fair amount of money I made on those trades. Have some long term ones still in play at attractive prices. Understand with market volatility I have been able to get some good put prices with good option prices. I learned this strategy from MS and would never have done this years ago.

I have also used this to replace stocks I sold at profits. For example have owned a lot of ATT for years, when market went down I sold it at $36-37 per share, very nice profit. Sold puts at $26-28 per share, made some money and I would not mind rebuying it at that price if market drops.

[Emil Bonaduce]

David helped to prepare me for the Covid Crash by helping us all to be wary, in January. I was raising up to 20% cash at that time, and another 10% in February just prior to the first big drop. David’s advice has been very calming throughout. I have lost paper money on the whole portfolio but have been making profits here and there by following some of David’s low risk high reward trades, both his trades and my own. My positions are very lean at the moment waiting for the second shoe to drop on the market. Once I get confidence that the lows are definitely in, I will get a lot looser with the purse strings on the cash. Brandon has been very helpful with identifying new DGI stocks to buy while avoiding some of the stinkers who might lower their dividends. The important thing is that I haven’t let my emotions get to me, and I look forward everyday to buying and selling and trying to make profits while I can until the market has fully recovered. David’s Market Outlook from April 6th was one of the best he’s ever given, and if most of his probable scenarios come through, all market scholars will be better for it. Being with Market Scholars from Day 1 has been one of the best investments of my life.

[Ken Watson]

Most of my portfolio is in DGI, which in down with rest of market, still pleased overall. I find my self trying to follow Directional Options, Technical Analysis, and Market Outlook more often now. Factor Based Swing Trading is favorite, looking at short positions in this environment. Really glad I joined Market Scholars when I did, early 2018. Thanks David and Brandon

[Jean-Yves Chevallier]

MS has been great for me as I need the income and it really increased my returns and peace of mind over the past 2 years. I was starting to do just fine until…

COVID 19 and the oil crash took me on the back foot: very little cash, lots of oil stock, RCL, DAL, SPG. So I went down to the bottom losing just as much as the overall market.
As in previous crises, I rediscovered the virtues of discipline anf now I am recovering b a bit etter than the overall market. I’m also now about 40% cash so we better retest those bottoms!
I’m still too inexperienced and too chicken to go into options (except selling a put on PG (May 15 at 100) .
Dipping into international ETFs.

Trying to come up with a bounce-back (short to intermediate) shopping list:
industrials: GD, CAT
tech: AVGO
discretionary: PLAY, others?

Other ideas welcome!

[Gerald Woodyard]

I was able to enter into this market correction with my investment account in a very good position because of the factual information that Dave and Brandon offered during their Market Outlook videos and also through the information presented in their education classes. I am very satisfied and happy with my membership with Market Scholars. I am in this for the long haul and I highly recommend Market Scholars to any body and everybody that is interested in learning
the how to-s of managing an investment account with factual information that is offered through Tech. Analyst

[Gerald Horschman]

David / Brandon,
*
I joined the Mkt Scholars during the Christmas promotion last year.  This is the best trader education that money can buy!  At the recent bottom, I was down about 10% and thanks to both David’s great Long Put Spread suggestions and Brandon’s — Can you believe this? suggestions I own some really good companies at killer prices.  At present, I am down about 5%.
*
It is amazing how two people with such diverse trading styles can complement each other so well.  For two guys (and your software development staff), you guys put on a pretty good show.  You run circles around the guys at TD Ameritrade with their massive training budget!
*
I really like David’s rigorous analysis of the markets and the MO-Live.  Walking though the existing trades is awesome.  I changed my monitor page format to match yours and help me keep better track of what is going on.  
*
I have used a number of Brandon’s trading ideas as well.  I am more into selling puts than buying stocks outright.  So, generally speaking, when I sell a put, I want the company.  Sometimes you can get both!
*
Great job,
*
Jerry

[Irene Zingg]

During the market correction of 2018 I made many mistakes and I saw my port go down quite a bit, then I saw it go back up a few months later, but I felt I really didn’t apply my acquired knowledge from Market Scholars they way I should have. So I made note of everything I did wrong and I put together a guide of what I should have done instead so that I would not repeat my mistakes in the future.
In January, I listened to David and he expected a pullback, so I took lots of risk off the table, I bought puts in SPY and IWM with March exp, I went long TLT and GLD, I opened collar trades on a few trend trades that I did not want to close. I Beta weighted my port and made it more Delta neutral. I took low risk spreads, both bull and bear.
Then the big drop came and my puts started making money. I rolled them twice since the Delta kept increasing quickly.
I took small losses on previous bullish momentum trend trades and then saw them drop precipitously.
I resisted the urge to freak out and left my DGI positions alone despite seeing them dropping. On the ugliest days of the drop where the VIX was going to the moon, I sold puts on several DGI candidates from my “must buy at the right price watchlist” significantly far OTM with very juicy premiums. Then I went long on several DGI candidates that I did not want to miss out on, even if they where to drop further, such as MMM, JNJ, WMT.
I browsed the indices for winners on big losing days on a daily basis and I added some “momentum” positions on NFLX, INO, MRNA, CLX which have been moving in the right direction for me. I wanted to short the airlines given the dire situation for this industry, so I took a short position on the ETF JETS and also on BA. Since my port’s Delta was neutral, I had positions doing great on down days and others not, but then the opposite happened on the up days. So I took small profits along the way. My account is up 5.8% as of today. I feel grateful for all that I have learned from BVZ since 2015, and for all that I have learned from David since 2018. 5 Years ago I had never seen a stock chart. Investing for me was basically meeting with my asset manager at Merrill Lynch on a yearly basis and following his recommendations. Today I am a self directed investor/trader making my own decisions day in and day out, and that is a blessing. Thank you both for everything you do to make this community wonderful and for the best investing education out there.

[Mark Olszewski]

I had absolutely no skepticism when I first joined Market Scholars. It looked like a solid value add, with my novice investing experience, flexibility of offerings, and tools they provide. My approach was to be conservative with my quantity of $’s, but aggressive with what I was willing to invest in the market. Over time, Market Scholars has expanded my knowledge so much; From a variety of investing methods, to keeping my emotions in check, and applying my learnings and what the experts have taught and continue to teach me. This has significantly changed my original investing mind-set. In addition, one thing I never anticipated, was the growing confidence I’ve achieved that helps me remain calm under all market environments, and allows me to not only abandon my fear of the next bear market, but to look forward to that as a buying opportunity, because Market Scholars has enabled me to properly manage my total portfolio, and have the means to seize those opportunities! If you’re willing to spend a little time and like to learn, become a Market Scholar! Mark Olszewski

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