On The Prowl For First Stage Bases: Kathy Donnelly | Investing With IBD

TL;DR

Learn from portfolio manager and co-author of The Life Cycle Trade, Kathy Donnelly, as she discusses finding first stage bases and potential stock opportunities in the current market.

Transcript

hello everybody and welcome to the investing with ibd podcast sponsored by vantagepoint it's justin nielsen here your host and joining me as always it is arusha peeras from o'neill global advisors he's a portfolio manager over there how are you doing arusha i'm doing well justin and on the show as our special guest we also have kathy donnelly comin... Read More

Key Insights

• 🎁 First stage bases indicate potential future price strength and present opportunities for significant gains in stocks.
• 🍭 Recent IPOs, as well as established stocks, can display desirable characteristics for investment potential.
• 💪 Kathy emphasizes the importance of sales growth and occasionally considers stocks without earnings if they exhibit strong sales potential.
• 🧘 Managing positions with caution during market volatility can minimize risk and maintain connection with the market.
• ⚾ The importance of ongoing stock analysis and evaluating potential opportunities based on individual stock criteria.
• 😃 Kathy's powerpoint approach helps her train her eyes to recognize patterns and potential opportunities in stock charts.
• ✳️ The significance of patience, discipline, and understanding individual risk tolerance in portfolio management.
• 😀 Kathy's personal experience with language learning app Duolingo and the potential it offers in an expanding market.

Questions & Answers

Q: What are first stage bases, and why are they important when identifying potential stock opportunities?

First stage bases occur early in a stock's lifecycle and provide opportunities for significant gains. They represent a consolidation period after an initial run-up, indicating a healthy pullback before the stock potentially moves higher. Identifying these bases is crucial as they can signal future price strength.

Q: Can you explain your approach to finding potential stocks and the importance of sales and earnings?

Kathy places an emphasis on recent IPOs and looking for new stocks that exhibit potential. Sales growth is key, and while earnings are important, she will still consider stocks with strong sales growth and promising futures. Kathy looks for stocks that meet her criteria for potential gains.

Q: How do you manage your positions during market volatility?

Kathy maintains a mix of one percent positions during periods of volatility to stay connected to the market without taking on too much risk. This allows her to monitor stock movement and make informed decisions while minimizing potential losses.

Summary & Key Takeaways

• Kathy emphasizes the importance of finding first stage bases when identifying potential stock opportunities.

• She discusses two stocks on her radar: Ollie's Bargain Outlet Holdings (OLLI) and Duolingo (DUO).

• OLLI has formed a cup-with-handle base below the 40-week moving average line, showing potential for a breakout. Kathy believes the company's innovative approach to online learning could drive growth.

• DUO, the language learning app, has also shown potential with its current base formation. Kathy shares her personal experience using the app and explains the company's expansion efforts.