It is possible to be right and wrong at the same time. I know that sounds like classic double speak used by spin masters of political parties on the Sunday morning talk shows, but it can happen. The reason for the confusion is that people lose focus of the main priority and are distracted by a point that may seem negative. They are asking the wrong questions They are sidetracked by critics that have their own agenda, or they are just genuinely negative looking to tear something down. Allow me to explain.
What if I told you that I was right 80% of the time with my stock picks? Would you be impressed? What if I told you I was right 20% of the time? Would you want to invest with me? There is not enough information with either of the two hypothetical questions. The percentage of the time that I was right is immaterial. The question should be, what returns were you generating? What if I was right 80% of the time, but lost money? What would your response be? It would probably be something like, “Your successful picks mean nothing since you lost money.”
The reverse is also true. What if I was right 20% of the time, but I made you money? What would your response be? It should be something like this: “If you are generating returns that meet or exceed my goals, I don’t care how wrong you are, because the bottom line is that you are making me money.” The percentage of time that one is right or wrong is just noise. The goal is making money and if that goal is achieved, the percentage of time one is right simply does not matter.
In last week’s blog I had presented our results for 2025 and if you looked closely at the short sells that were recommended, you can see what I am talking about. At first glance you would think the short sells were failures, but a deeper dive is needed. Last year I made 237 short sell recommendations, and I was wrong on 121 of them. I was wrong 51% of the time, but the 49% of the time I was right, the profits far exceeded the losses.
The net result was a 95.98% gain. By ensuring you diversify and do not put more than 5% of your portfolio on one stock and if you had used a 3x margin factor, you would have an annual return of 14.4% shorting stocks for 2025. This happened while the S&P 500 was up 16% for the year. Let that point sink in for a moment. A 14% return on stocks going down while the S&P overall went up 16%. That is a double-digit return going against the grain. You can be right and wrong at the same time.
Twopercentgoal.com uses several technical analysis tools to reach its goal. It uses Relative Strength Index (RSI), the 50-day/200-day moving averages, the Moving Average Convergence Divergence (MACD), on-balance volume and the stochastic oscillator. When all tools are used together, it provides a very strong story for success whether shorting or going long. To see how all of the tools are used together, watch this YouTube video:
We are very proud of our results for 2025, and we look forward to a prosperous 2026.
Cheers,
Al