If you're heading to Wall Street, you'd better leave that Magic 8 Ball behind.
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Sure, the plastic sphere, which was invented in 1946 and used for tell fortunes and give advice, is a lot of fun, providing answers like "signs point to yes" and "better not tell you now."
But do you really want to use it as part of your investment strategy?
My sources say no.
"You know when the Magic Eight Ball is on a roll, you stay with it. That's the trading superstition in me," global strategist Jay Woods said. "But no, you know, what I do is I always follow price action as a market technician."
Woods shared his thoughts about investing and the current state of the market with Chris Versace, lead portfolio manager for TheStreet Pro Portfolio, in the April 23 edition of TheStreet Stocks & Markets Podcast. Woods laid out his investing style.
Investor says uncertainty is the word of the year
"For me, it's always about risk management and then setups from a risk-reward perspective," said Woods, chief global strategist at Freedom Capital Markets.
And what about price action?
"You look at something as simple as the last sale," he said. "Once you buy a stock, you're anchored to that price. That is your level where if it goes up, you're making money; if it goes down, I'm losing money. And when it goes down, you look at it differently and you have to game-plan differently.
"So, whenever we talk about trade ideas and time frames, I want to know exactly what that ultimate goal is by someone getting in. And when I set up trades, you look at risk-reward."
Versace noted that the market landscape is always changing, with new data and fresh insights.
"If you haven't noticed, it's been a little volatile lately," Woods said. "So time frames are quick and goals are met very quickly, from tweet to tweet, as we like to say."
Volatile is one way to describe the current situation. In fact, things are so charged up that the CEOs of three of the nation's biggest retailers — Walmart (WMT) , Target (TGT) and Home Depot (HD) — privately warned President Donald Trump in an April 21 meeting that his tariff and trade policy could disrupt supply chains, raise prices and empty shelves, Axios reported.
Woods said that since Trump's been in office the word of the year is "'uncertainty' because we aren't certain exactly how tariffs are being used.
"Are they a negotiating tactic? How long [might they] be exactly? Who will be implicated by them? [There] are a lot of questions. And every day we look for answers and it seems like we get one answer but three new questions. So it is volatile."