A couple of weeks ago, I told you that some of my longtime readers made more money on Apple Inc. (Nasdaq: AAPL) because their shares fell sharply along the way.
If that sounds counterintuitive, then you'll want to pay close attention to today's report.
That's because I'm going to show you how they did it using one of our best trading techniques.
Better yet, I'm going to show you how to do the same thing with the stocks you own now.
Let's get started.
No Free Lunch That Day
About a dozen years ago, I found myself having a stimulating conversation one sunny day in San Francisco with the great economist Milton Friedman.
It's a conversation I'll always remember.
I studied economics in college – in fact, I'm the recipient of an honors degree in that subject – and the tireless free-market advocate has long been one of my big heroes.
We were standing on the balcony of his spacious Nob Hill condo taking in the sweeping San Francisco Bay views and talking about economics and Washington politics. At one point he looked me in the eyes and said, "You know, Michael, I'd like to see the Federal Reserve replaced by a computer."
As the 1976 Nobel Prize in Economic Sciences laureate explained it, he felt the Fed had become too obsessed with micromanaging the nation's economy. Remember, this was more than a dozen years ago, long before the Fed started quantitative easing and heavily manipulating interest rates.
Of course, I'm not suggesting we replace the Fed chair with a robot.
But I always recall Freidman's thought experiment whenever the markets or an individual stock I like get choppy. That's when I know it's time for defense.
So today, let's explore a classic investment strategy that I've given a brand-new nickname to reflect our focus on the "New West" of Silicon Valley tech stocks.
We call it the "Cowboy Split."
Today I'm going to show you that when employed properly, the Cowboy Split will protect you from volatile markets.
But that's not all.
If your stocks go down, on the recovery, you make more money…
Rounding Up Profits
Even after the big, big run-up we've seen since the Nov. 8 election, we're still in the early stages of a generational bull market that could run for up to two decades.
The U.S. economy continues to gain momentum.
And tech is leading the way with high corporate profits, strong cash flow, and great operating margins.
However, we'll keep seeing setbacks along the way. No bull market advances without occasional corrections and sell-offs.
Just imagine what might happen if a major scandal emerges from the Trump administration, North Korea tests another nuclear weapon, or if a firefight breaks out in the South China Sea.
While the Dow Jones Industrial Average keeps breaking to new highs almost daily, many investors are getting just plain scared that another major correction could occur any day.
Then there's individual stocks. The depressing trend of companies with the slightest hint of trouble quickly selling off does …
About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.