SMOKE: When did you first become interested in playing the stock market?
PERRY: Sometime around 1994 or 1995. I was in a lot of the internet chat
rooms and message boards, and I started sharing my stock picks.
Eventually someone suggested I create a newsletter. I did that, and
around Thanksgiving of ^Ñ96, I went away for a week and a half, and when
I got back I was deluged with e-mails, saying things like, 'Where the
heck are you? How could you leave us hanging?' That's when I realized
maybe I could make a buck or two at this.
SMOKE: In a nutshell, what is your trading philosophy?
PERRY: Trade with the trend. Buy high, sell higher. Go with momentum.
Take what the market gives. Be opportunistic. Don't fight the market.
SMOKE: What can a novice investor learn from you and your newsletter?
PERRY: Discipline, discipline, discipline! That is the most important
thing in playing the stock market. Having a disciplined approach, having
a plan, having rules and following them. We've been around for a long
time, and our reputation is one of impeccable integrity, excellent
customer service, and, especially, dedication to educating a trader. You
can go to a lot of newsletters and get stock tips, but they don't tell
you how to manage your capital or how much of that capital you should
apply to a given play; if you do it wrong, you won't be in the trading
game very long.
SMOKE: What do you feel most novices find intimidating or confusing
about the market?
PERRY: These days, the same thing that the advanced traders do: the
rapidity with which the market can change on you. Also, with the growth
of online trading, there are so many good stocks to choose from, but the
best of them tend to be very active. Our methodology is when in a bull
market, we focus on stocks that are going to announce splits or have
announced them recently. These tend to be the the strongest, industry
leaders like IBM, Yahoo!, QualComm. These aren't the kind of companies
that tank 50% in a day. They're influenced by the market, but they have
bulletproof fundamentals to back them up.
SMOKE: Define 'Power Trading.'
PERRY: Power Trading is trying to make a maximum amount of gain with a
minimal exposure to market risk. It's finding the strongest stocks, in
the right conditions, with all the right forces in play, getting in,
making a maximum amount of return, and getting out. We teach you that
minimizing risk is not analogous with limited return.
SMOKE: What would you say to new investors who are looking to strike it
rich quick, then get out?
PERRY: Play the lottery! I've heard too many people say, 'My buddy
George down the street bought so-and-so, and he made $100,000 in two
weeks!' My response is, this isn't a game. This isn't Las Vegas. Trading
is a profession and a business. The people that are educated about it,
who are committed to it, who take it seriously, who put in time and
effort ^× that's the profile of a successful trader.
SMOKE: How do you think the Microsoft decision will affect the
technology stocks long term?
PERRY: I think the decision was long overdue, but remember I'm an
ex-IBMer, and we all have axes to grind! (laughs) I don't think that
breaking Microsoft up will materially affect tech stocks. When they
broke up IBM, and the Baby Bells, as I recall, all the individual units
got fundamentally stronger, not weaker.
SMOKE: Some have speculated that the growth of e-trading will signal the
end of the flesh-and-blood stockbroker. Do you agree?
PERRY: I don't think so, at least not in the near term. But I think we
are seeing a paradigm shift in the traditional stockbroker, and in the
market itself. People are taking responsibility for their own
retirement; they're no longer betting on Uncle Sam and Social Security.
It's 401K's, IRA's and the like that are constantly fueling the market.
SMOKE: What's more satisfying, racing motorcycles or teaching investors
how to make money on stock trades?
PERRY: It's two different feelings, but I think I've gotten more
satisfaction from teaching people how to be successful traders than I
have from anything else I've ever done. I once received a note from a
lady in Florida that said, 'I have no insurance, and because of your
recommendations I made enough money to get a liver transplant.' Some of
these messages are really heart-wrenching.
SMOKE: Trading and writing the newsletter used to be a hobby. What do
you do to unwind now that this is your business?
PERRY: Well, I still race automobiles... I have my 1999 Trans Am set up
for road racing, and I take it out about once a month and let it fly. At
the end of a long day of racing, it's always nice to get together with
my friends and do what we call 'bench racing' ^× talking about our day
and smoking cigars.
SMOKE: What are some of your favorite cigars?
PERRY: One is a Cohiba Robusto from the Dominican Republic, and there's
this new one that my neighbor turned me on to, a Nicaraguan brand called
Mayorga. It's an inexpensive cigar, but it's quite nice.
Fistful of Filler
