We use a lot of our own jargon on the show as a heuristic for communicating complicated investing concepts.
Here’s a quick overview of some of the most common terms. More details explanations can be found in the Club Member Resources, like the QAV Course and the QAV Bible.
- Josephine: a stock whose share price has fallen below the price it was at the end of the previous month, and is currently still below its Second Buy Line (2BL). We don’t buy stocks if they are a Josephine or if their underlying commodity (eg a gold mining stock’s underlying commodity is gold) is a Josephine. We wait until the price goes above a second buy line.
- Rule 1: a sell trigger (ie something that causes us to sell a stock) that is activated when the price of a share drops below 10% of what we paid for it.
- 3PTL: another sell trigger which is determined by using a Three Point Trend Line.
- Possibles: Sometimes there are stocks on our buy list that pass all of our metrics, but we can’t buy them for our Light portfolios because either a) we already own two parcels of them (which is our self-imposed limit to avoid over exposure) or b) their Average Daily Trade isn’t high enough to allow us to buy a second parcel (another self-imposed limit to avoid being stuck trying to sell the shares if their price suddenly collapses). However, we are aware that not all Light members will already own these stocks (perhaps because they became members after we bought the stock), so I add them to our “Possible Buys” tracking portfolio and notify Light members that they are a possible buy, but we won’t be adding them to one of our official portfolios. Instead we add them to a special watch portfolio and will advise members when they become a sell based on our usual sell triggers.