Great Trades Start With Great Catalysts
My positions need a catalyst.
Two types:
1) defined catalyst, 2) undefined catalyst.
Defined catalyst:
- happens on a known date or within a known window
- you know what you’re waiting for
example
- $SpaceX(SPCX)$ ipo
- product launch
- earnings
Undefined catalyst
- you know what could drive the business
- you just don’t know when the market will recognize it
examples:
- ai driving demand for cybersecurity
- aging demographics increasing healthcare demand
- robotics adoption
I trade them differently.
Defined catalysts = better for shorter-term positioning
Undefined catalysts = better for accumulating + waiting for the thesis to play out.
Know your catalysts intimately pre-trade.
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