And it sounds like we haven't been talking about DocuSign
for a while. This was one of the covered darlings, you know, 20, 20, 20. You
know, everyone was like, well, gosh, you know, forget these wet signatures,
let's go e-signature. And they just really seemed to dominate everyone was
afraid that Adobe was going to eat their lunch, but they really, you know,
maintained a leadership position there.
00;52;47;28 - 00;53;06;04
Unknown
So what's what's your take on DocuSign? Something that's been out of favor. My
take is from a risk reward point of view, it looks like the set up is a little
more favorable for the bulls and you have an out you may have to rip this one
out of your portfolio immediately. If you're playing it for earnings, take your
loss and move on.
00;53;06;10 - 00;53;25;20
Unknown
But given the fact that we have a constructed base, we have a lot to reverse.
This thing was in the 200, we're 300. I mean, that's that I would never give an
upside target like that, but it is trending. The downtrend has been broken. So
I want to stop going down to its bases now. The base is making higher lows.
00;53;25;26 - 00;53;44;19
Unknown
It's holding above its 200 day moving average technical reminds me a little bit
of carvana where we saw that same exact thing happen. A lot of fundamentalists
at Carvana. But I'll tell you right now, from a technical point of view,
knowing that there were shortages in that one as well, the stock has rallied. I
don't know the shortage just off the top of my head and DocuSign.
00;53;44;24 - 00;54;05;18
Unknown
But right now the shot up is trending above its 200 day moving average. It's
flattening, starting the turn up. I think if you get positive reaction to
earnings, maybe they guide that this stock in gap you if you're not in it maybe
you want to buy that gap put your stocks close to you when you buy gas on an
opening so like two and a half, 3% below.
00;54;05;24 - 00;54;26;25
Unknown
But it can run and it could run quickly. So the setup for DocuSign, to me, risk
reward point of view is very appetizing and it may be worth a flier next week
and I'll focus on it in my newsletter. So generally going into earnings, how do
you adjust for the risk there, maybe going with a smaller position if you want
to buy before earnings or up?
00;54;26;28 - 00;54;47;11
Unknown
I had a strict rule, especially when I was a market maker on the floor. ICE was
one of the stocks I was the market maker for. I would be flat going into
earnings every single time. I do not trade stocks for earnings if I'm a long
term shareholder, I or Google. I'm not even going to care about earnings
because the earnings aren't going to change my mind unless the trend has a
major change.
00;54;47;14 - 00;55;07;06
Unknown
So if I believe it's a long term holding, then I don't worry about earnings.
I'm not trading it for earnings. If I want to take a little bit more risk on
like in a DocuSign, I'm not recommending anyone do this, but if you do, the
parameters are there and if it fails, get out. Do not make this a long term
investment.
00;55;07;10 - 00;55;28;04
Unknown
This is a trade opportunity, so I wouldn't recommend buying it. It's to
earnings. I will chase a gap. I will. I love gaps. I mean, if you want to go,
we can do a whole special on trading gaps. Those things are important to me.
But right now, seeing that something has changed, it's got my interest and it's
worth talking about, it's worth focusing on.
00;55;28;09 - 00;55;57;28
Unknown
And if someone wants to take a shot, No, the risk reward, I think the setup is
there that the risk outweighs the reward. Outweighs the risk in this case.
Yeah. And that's that's such a key point. You brought up risk management as
being rule number one, two and three. And if you can keep that small, you know,
and again, you've got a lot of room to potentially recover, you can be wrong a
lot of times if you keep that, you know, if you keep your risk small and your
reward potential large.
00;55;57;28 - 00;56;17;00
Unknown
So, I mean, that seems like an easy I'm wrong all the time, but you want to
keep things simple. This goes back to Alan Schall level two S.A.T. class I took
in 1993, for thing, and I don't know where he stole this from, but I credit
Alan, the late Alan Shore, for things happen when you get into a trade as a
trader.
00;56;17;00 - 00;56;30;06
Unknown
And I've seen them all. We've all seen them all. You have a small gain and a
small loss. These are normal things. You can have a big gain. That's the goal
and you have a big loss if you're going to survive in this industry. You got
avoid one thing, avoid the big loss. Check your ego at the door.
00;56;30;11 - 00;56;50;27
Unknown
I get this small loss. I'm getting out. Maybe I would have been right. Maybe
this could be an investment over time. But avoid the big loss and live the play
another day. That will tell every trader, day trader, swing trader, long term
trader. If you're putting too much allocation into one asset and you are going
to take the big loss, guess what?
00;56;50;29 - 00;57;08;19
Unknown
You're not going to be able to put it anywhere else. So you take that small
loss and move on to something else. There are 6000 different asset classes you
can train. They keep coming out with new ones every single day. Don't get
married to this stock. You sign because the risk reward set up was good and I
mistake.
00;57;08;26 - 00;57;30;00
Unknown
Well our cost average into it. Or know your game plan is your game plan and a
little loss is going to happen. And yes, it stinks when they do. But if you can
leave the behavioral and the ego at the door and you take that little loss, you
move on, you can yell and scream at me. If I'm the reason you got into this
trade, that's fine.
00;57;30;02 - 00;57;53;28
Unknown
Be like I'm home and you know everything. You know everything. You know, you
move on to the next idea. There are always ideas out there. That's what's great
about the stock market. Yeah, well, hey,
