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EXPERT SPOTLIGHT
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EXPERT SPOTLIGHT
DAMON SOUTHWARD
Chief Market Strategist
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Since 1996, Damon has provided analysis over the Briefing.com platform. He oversees a team of fundamental, technical and special situations analysts focused on uncovering short-term volatility opportunities and intermediate-term investment ideas. His team produces actionable commentary in Equities, ETFs, Fixed Income, Commodities and Futures. His analysis can be found on Briefing.com premium products under the SCALP, YIELD and
FOCUS custom tickers.
Get the inside scoop on Damon Southward. This expert spotlight features:
• Q&A
• Analysis
• ScalpTrader Comments
• Featured Videos |
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Q & A
Q: You’ve been providing analysis for Briefing.com for the past 15 years. What trends or themes are you currently seeing in today’s market environment?
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A:
Patience and Research Rewarded.
When I started in this business, speed was one of the most important
factors in an active investor or trader’s success. News of a 2-for-1
stock split could be good for a 10% move for those who punched their
orders in quickly. A major contract announcement could easily set up a
50-100% run in a stock. And, if you traded on a platform such as the
SOES system, you could even get your orders filled ahead of most Retail
investors.
In this new era of individuals competing with supercomputers to read,
analyze and trade news, I estimate that speed makes a difference in less
than 20% of opportunities. In my opinion the ability to perform
fundamental analysis and to practice patience have taken over as the key
elements of success for both investors and traders. Given the bouts of
extreme volatility we seem to get about twice per year, the opportunity
is given to buy stocks low and ride them back for potentially
spectacular gains. Unfortunately, many people only want to buy into
strength, with the crowd, and then get frightened into selling with the
crowd during periods of heightened volatility. This is not a recipe for
success. Rather, it’s dysfunction. In my opinion, the three steps to
recovery (success) in this market are to: 1) know what you want to buy
(fundamental story, relative value metrics, growth drivers, etc), 2)
exercise patience by waiting to purchase at lower prices, 3) scale into
the position instead of buying it all at once.
Briefing.com has developed several proprietary strategies and provides
ongoing research reports that help you identify the types of names worth
owning. |
Q:
What are some of the strategies that are currently working for you and your team?
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A:
We have developed multiple strategies to help
investors and traders identify attractive stocks and general
opportunities in the markets.
Emerging Growth: This system identifies the most
compelling growth names in the market based on fundamental and technical
outperformance. Our team provides ongoing fundamental and technical
analysis that helps you stay out in front of the story and identify
attractive entry points.
Emerging Value: This system identifies deep value
opportunities that are starting to show signs of institutional
accumulation. Studies have shown that the combination of certain
valuation metrics combined with high relative strength has outperformed
just about all other strategies.
Income Focus: Investors have become infatuated with the
perceived safety of yield. However, not all Yield opportunities are
created the same. Our Income Focus team helps investors identify
attractive Relative Value opportunities in Stocks, ETFs, Preferred
Securities, Royalty Trusts, MLPs and REITs. Surprisingly, the Yield
space also provides great opportunity to active traders interested in
executing a Relative Value approach or trading the Syndicate Calendar.
Liquid Momentum: Designed for swing traders, Liquid
Momentum features daily set-ups for names in our proprietary Focus List
of the 50 strongest, most liquid stocks in the market today.
TA Page Scans: Designed for swing traders, Liquid
Momentum features daily set-ups for names in our proprietary Focus List
of the 50 strongest, most liquid stocks in the market today.
The Next Big Thing: Our team identifies and rates the
most attractive IPO opportunities.
Special Reports: Provides strategies for profiting from
various market-driven themes or events using stocks and/or options.
Areas of focus include Covered Calls, FDA Calendar, Earnings, M&A.
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Q: One of the most frequently asked questions you get from our readers is “what names do your analysts like?” How do you respond to this?
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A:
In an effort to bring our very best ideas front and center for our premium subscribers, the Briefing Strategies Team has just begun publishing reports to the Stock Ideas page containing the investment opportunities that our team feels most strongly about.
The highlighted opportunities will mainly consist of stocks, but will also incorporate options strategies, yield opportunities, and ETFs. These ideas will be pulled from across product lines to form essentially our Best Ideas "focus list."
I think one of the most compelling features of this report is that these are the securities that our analysts are actually investing their own money in. In this regard, the criteria that we're going to use for these ideas going forward is that the analyst: a) already has a position in the idea, or b) planning to buy but simply looking for a slightly better entry point. Given the number of companies we research on an ongoing basis, we think the fact that our analysts are highlighting these as their top ideas should carry some weight.
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Q: You are known for uncovering volatility trading opportunities via SCALP on Briefing Trader’s Live In Play page. But you also provide intermediate term analysis. What do you provide in terms of analysis and where can our readers find it?
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A:
I personally provide analysis and commentary on In
Play, Strategy Meeting Key Notes and Income Focus. From a trading
perspective, my areas of focus are: Information Flow, Syndicate,
Volatility Events and Special Situations. From an intermediate investing
perspective, I focus on Yield Relative Value and Distressed Situations. |
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Analysis
Check out the excerpt below from the Strategy Meeting Key Points report.
In each report our Analysts and Traders discuss market trends/conditions and share their best ideas.
Patience and selectivity cannot be emphasized enough in this
environment. I continue to prefer leveraged volatility and directional
instruments as the vehicle of choice for playing intraday movement in the
markets. For long side exposure, I'm primarily trading TNA, which is the
Direxion Daily Small Cap Bull 3x, which seeks to mimic the intraday
performance of the Russell 2000 by a factor of 3. On the Short side, I'm
using TZA, which is simply the Bear version of TNA. Also continue to use
TVIX to position for drops in the market. It seeks to return 2x the daily
performance of the S&P 500 VIX Short-Term Futures Index.
Have been seeing aggressive fading of high profile, high multiple IPOs such
as Groupon (GRPN) and Angie's List (ANGI). It seems than 10x sales just
doesn't fly any longer. These stocks are popping dramatically on the buzz
from the IPO, only to get chopped back down 30-50% amid aggressive shorting.
Sometimes it's easier to execute the short trade via Options because IPO
shares can be difficult to borrow during the first month or two. Just as
interesting is the pattern after the initial 30-50% pullback from highs:
these stock are seeing 30-50% rallies, which are being driven by aggressive
short-covering.
If trading intraday, I think it is essential to stay on top of the latest
events coming out of Europe. Event Trader (EVENT) does an excellent job each
morning and evening briefing readers on key developments around the globe.
The instant analysis on intraday news items is also extremely helpful, as it
gives me an edge on trading the ensuing volatility.
In my long-term portfolio, recent purchases include Citigroup Capital XII
8.5% Fixed/Float Preferreds and Zions Banc 9.50% Series C Non-Cumulative
Perpetual Preferreds. I purchased both around the $25 par price. With
Citigroup, co remains very profitable, the stock is trading at a level that
would allow company to raise money through a secondary offering if needed,
and the yield is right. There is a chance that the security can be called in
January due to regulatory changes in Capital Treatment. I think this
overhang is why the stock has hovered around the $25.00 area. However, even
if the security is called, it will go out at $25.00 plus the $0.53 dividend
that is due for the quarter. If it isn't called, I think it goes to
$26.50-27.00. I find the Zion Preferred attractive because of the company's
extremely conservative reserve release policy. Zion has publicly stated that
it is holding reserves as long as possible in order to maintain a
conservative posture. This reserve stream should help power earnings for the
foreseeable future. |
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ScalpTrader Comments
Damon provides live trading calls and intraday set-ups for those looking to scalp trade on the Live In Play page under the SCALP custom ticker. Here are some examples of his ideas and commentary:
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Featured Videos
Watch our recent webinar events to learn more about the analysis and strategies that Damon and his team provide to our subscribers.
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