That was the urgent recommendation from “wizard” trader Larry Benedict last night.
As I (Chris) showed you yesterday, Larry is one of the world’s most successful traders.
That got him featured alongside investing legends such as Paul Tudor Jones… Jim Rogers… and Ray Dalio in the Wall Street cult classic Market Wizards book series.
And last night, in a web broadcast, Larry urged Legacy Research readers to get bullish (in trader-speak, “get long”).
As you’ll see today, when Larry makes a call like this… it’s worth paying attention.
I (Chris) will also tell you more about Larry’s “secret sauce” that allowed him to rack up 20 straight years of profits in the market between 1990 and 2011.
You may be familiar with that phrase.
It refers to the tendency for the stock market to rally in the weeks leading into the Christmas holiday.
Nobody is sure why this happens. Theories range from a bump in consumer spending… to traders putting their bonus checks to work in the market… or just holiday good cheer.
But whatever the reason, in two out of every three years since the 1960s, U.S. stocks have had a positive return in December.
The S&P 500 is our regular stand-in for the U.S. stock market.
And in 2018, as you may recall, it plunged almost 20% between September 20 and Christmas Eve. That’s the standard definition of a bear market.
Take a look…
That makes Larry bullish heading into the rest of this December. As he told the folks who tuned in for last night’s special training event…
Seasonally, December has been a great month for the stock market. So it’s a high-odds bet that we’re going to get long going into year-end. I’ve watched the market for 35 years. And for whatever reason, it never does the same thing twice.
Last year, into November and December, the market had a swoon. It was down almost 20%. So that’s two factors in our favor – seasonality and my observation that the market never does the same thing twice. I think we’re going to see a Santa Claus rally this year. That’s a significant opportunity for traders. And that’s what we’re playing for.
You can hear more from Larry on what he expects ahead… and how to profit… by catching the replay of last night’s broadcast.
If he’s right, now is the time to get positioned for an explosive year-end burst.
After 35 years of watching the tape, Larry has developed an instinct on where markets are headed.
Here’s David Horowitz. He’s a trader who worked at Larry’s $1 billion hedge fund, Banyan Capital Management…
Larry is essentially a risk manager. It’s not about making a lot of money. Of course, it’s important to have return, but for Larry it’s more important not to lose money. He knows that if he can manage the risk, he will make money. He understands when he is wrong, and he knows when he has to get out.
Jack Schwager, author of the Market Wizards books, was also impressed with Larry’s focus on risk management…
Risk management dominates Benedict’s approach. To say he is cautious is an understatement. If his losses in any month approach 2.5%, Benedict will liquidate the entire portfolio and start with a clean slate the next day, trading at a reduced position size. […]
The rapidity with which Benedict cuts his exposure explains why he has never had a large monthly loss. His worst month in 13 years of trading (seven years in his fund and six years previously in a managed account and proprietary account) was a moderate 3.5% loss.
As I told you yesterday, Larry’s style is right up my street.
He knows that if you always keep your downside risk low… the gains will follow. And that’s a lesson I’ve always tried to remember in my own investing.
Why?
As Schwager notes in the foreword to his first Market Wizards book, it’s the golden thread connecting the world’s great traders.
It sounds boring. And it is if you’re the type of trader who’s always swinging for the fences.
But if you’re more comfortable building your fortune slowly – and more safely – by booking lots of singles and doubles, then Larry is the guy for you…
And he’s had plenty of home runs along the way, too – 193%… 239%… 286%… 327%… 703%… etc.
Larry used this conservative strategy to haul $274 million out of the stock market between 2004 and 2012.
And, between 2004 and 2012, his fund averaged an annualized return of 19% (including compounding).
And the biggest loss he took along the way was just 5%.
That’s a staggering achievement. And it makes Larry one of the world’s greatest traders, alongside fellow “market wizards” Paul Tudor Jones… Jim Rogers… Stanley Druckenmiller… Richard Dennis… Michael Carr… and Ray Dalio.
So, if you missed Larry’s event last night, make sure to catch the replay of America’s First Trade-a-Thon here.
And remember his advice… Now is the time to “get long” the market.
The S&P 500 shot up 0.86% today, so the Santa Claus rally is gaining steam…
Regards,
 |
Chris Lowe
December 12, 2019
Baltimore, Maryland
P.S. If you’ve never picked up a copy of Market Wizards… do it now. There’s a reason it’s one of the most underlined investing books I own. There’s also a reason it’s handed around so much on Wall Street.
Schwager gets inside the heads of the world’s greatest moneymakers so that you can, too. And as you’ll see, the secret to success is a lot simpler than most folks believe. As Larry says, it’s all about having a discipline and sticking with it.
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