It is no surprise, SmartStop risk monitors continue to show above normal risk in the market. We ended the week with 85% of the 4,000+ covered equities in the above normal risk state.
Percent of
covered equities designated by SmartStops to be in an above normal risk state day by day.
(Equities
are considered to be in an above normal state of risk from the first SmartStops
exit trigger in a series until a reentry trigger has been hit). 
Percent of
covered equities triggering their Short Term Exit (Risk Alert) day by day.
100 day mean: 2.6%. This Weeks Average: 5.1%
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Canary In The Coal Mine
How SmartStops Helps Alert You To Changes In Company Specific Risk
News is
continually issued on the companies we own, but only a small fraction of this news significantly
impacts the share price. How do we know when
to pay attention? How do we know if a
news event is having a negative impact on our stock or if we are just seeing a
normal price swing? SmartStop QuickAlerts
can help warn you when it is time take a closer look.
So far this
year, we have watched three widely held companies, all industry leaders and part
of many investors' long term core holdings, suffer operational issues that have
severely impacted their business prospects and share price. On January 21st, Toyota
issues a major recall, on May 1st, Johnson and Johnson issues a recall on Children's Tylenol and other
medications, and on April 20th an explosion on the BP oil Platform Deepwater Horizon
killed 11 people and initiated the massive oil spill that we are watching in
horror today. In each of these instances,
as the market began to digest the news and additional information was
forthcoming, the shares began to trade abnormally. SmartStops detected this abnormal price
movement and in each case issued a QuickAlert in the first few days of the
crisis before the equity had lost significant value.
 SmartStops
Risk Alerts are often one of the first signs that a recent event is having a negative
impact on a company's share price. For
the most part, long term investors don't have to be watching their equities too
closely each and every day. But if you
receive a SmartStops Risk Alert, this is the day you should take a look at that
one. Ask yourself, why is the equity trading
abnormally? What news or event has occurred? Is it truly impactful or is it a red herring? Have the fundamentals and / or the company's
prospects changed? Be alerted, educate
yourself, and take protective action accordingly.
Happy Investing
Your SmartStops.net Team
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