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 a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.