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                          The Origin of a Superior Strategy

 

 

In 1983, while visiting a local library, Mark Minervini read Richard Love's book Superperformance Stocks. While a good portion of the work was written on how the political cycle relates to the stock market, Minervini was intrigued by Chapter 7, which focused on the commonalities of big stock price performers. Love's studies from 1962 to 1976 focused on the common characteristics of stocks that went up a minimum of 300% within a two-year period without as much as a 25% correction; he called them Superperformance Stocks. 

Although Love's approach caught Minervini's attention, it wasn't until 1988 that the formulation of his own strategy took flight. He read an interesting article in the March/April 1988 issue of Financial Analyst Journal titled "The Anatomy of a Stock Market Winner." The article discussed the findings from a study of superior securities—stocks that went up a minimum of 100% in a calendar year. The author, Mark R. Reinganum, had explored 222 stock market winners from 1970 to 1983 to determine what contributed to their superior performance. 

Interestingly, the Reinganum study corroborated Love's findings. Furthermore, the purpose of both studies was almost identical: focusing on the characteristics of stocks that had made the biggest gains to identify the cause of stellar performance. The concept made intuitive sense to Minervini: study the best to find the best. This set Minervini on a course to learn what makes a stock move up dramatically in price to join the elite circle of Superperformers, and it ultimately became his life's work. And so, Mark Minervini turned on his computers and the rest is history.



Specific Entry Point Analysis® -SEPA®

 

Specific Entry Point Analysis® -SEPA® is a highly disciplined stock trading strategy developed by Mark Minervini. The methodology's foundation is built upon historical precedent analysis of past stock market "Superperformers." 

The SEPA® strategy focuses on identifying, company-by-company, the precursors of inefficient pricing in order to distinguish appropriate low risk/high reward entry points. Utilizing SEPA®, stocks displaying the potential for significant price appreciation are identified and pinpointed. This proven technology consistently highlights many of the best investment ideas and stock market leaders before they're widely recognized by Wall Street.

 

• To demonstrate the effectiveness of his SEPA® methodology, in 1997, trading against hundreds of stock, options and futures traders, Mark Minervini traded a stock only account to win the U.S. Investing Championship with a 155% annual return.

 

• Using the SEPA® trading strategy, in a five-and-a-half-year period Minervini generated a 220 percent average annual return (36,000% compounded total return) with only one losing quarter. To put that in perspective, a $100,000 account would explode to over $30 million with those returns.

  

Continue reading at : http://minervini.com/sepa.php


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