Steve McDonald: Hi, everybody. I’m Steve McDonald. This is your Market Wake-Up Call. Our guest this week is the supercomputer guy himself, Marc Lichtenfeld. He’s here to talk about how his Tactical Trader Alert has done and how his supercomputer system has done as well during this wild ride in the stock market. Boy, it’s been something.

Marc Lichtenfeld: Yeah. It’s been nine years of this wild ride.

Steve McDonald: Nobody ever expected this. I certainly didn’t.

Marc Lichtenfeld: Yeah.

Steve McDonald: I mean, I’ve been urging people to be cautious for a year. I know you didn’t think it was going to happen. Nobody on the street expected this.

Marc Lichtenfeld: No.

Steve McDonald: But the real question is how did your system do? I know your system isn’t designed to make calls.

Marc Lichtenfeld: Right.

Steve McDonald: But was it bullish all year during this run-up?

Marc Lichtenfeld: Definitely. It was. And as you mentioned, it’s not designed to make these big market calls. What it’s designed to do is pick great stocks. But what we found through backtesting and years of real-world experience is that when it gives me an extreme number of stocks whether it’s high or low – it’s usually a pretty big call for the market. So when it’s giving me a lot of stocks, that means back up the truck. When it’s giving me very few stocks, that means we’re at an inflection point – maybe time to hit the brakes. So throughout 2017, it wasn’t telling me to back up the truck, to be fair, but it was consistently bullish the entire year.

Steve McDonald: I know it’s not supposed to make calls…

Marc Lichtenfeld: Right.

Steve McDonald: So the question is what’s it telling you now? Is it still bullish? Is it slowing down? What’s it doing?

Marc Lichtenfeld: It hasn’t slowed down at all. Again, it’s not at an extreme level saying it’s time to back up the truck, but really nothing has changed. From week to week it changes a little bit. It doesn’t give me an exact same number, but it’s within a pretty tight range. It’s just been very consistent over the last six months at least, probably longer. And as far as I can tell from this indicator, the market should continue to be strong.

Steve McDonald: What’s working in the portfolio? Let’s get off the market and let’s talk just about the portfolio. What do you see in the portfolio now that’s working? What industries are working?

Marc Lichtenfeld: So we have 10 stocks that are in the portfolio right now. Eight of them are winners. The two that are down are down single digits. Now we’re seeing technology. Basically, whatever you’re seeing in the market, that’s typically what is working.

Steve McDonald: Your system really is mimicking or copying – aping the markets… Is that right?

Marc Lichtenfeld: To some degree because think about it… Chances are if technology is about to go on a run, it’s probably going to give me more technology stocks. If energy is about to go on a run, it’s probably going to give me more energy stocks. So I’m not out there trying to say, “OK, I want 20% of the portfolio in technology and 15% in… I’m not doing an asset allocation model, but the more stocks I have from one sector, that’s the more stocks that I have to choose from. And it kind of just naturally falls that way. Now, I might not go 50% technology. I might try to balance it a little bit, but it’s not an asset allocation model. And if a certain sector is running or is about to run, I’ll have more options to choose from that sector. So it will reflect the market for sure.

Steve McDonald: So when this starts to shift, you’re going to call me first, right?

Marc Lichtenfeld: Well, are you subscribed?

[Laughter]

Steve McDonald: I don’t know. I get so many of them I can’t read them all.

Marc Lichtenfeld: I’ll hook you up.

Steve McDonald: So you’re still seeing technology strong?

Marc Lichtenfeld: Technology is very strong still.

Steve McDonald: Anything you see trending upward?

Marc Lichtenfeld: Really, technology has been the main thing. I mean personally, I like energy, but I’m not seeing that in Tactical Trader Alert yet.

Steve McDonald: It’s not kicking them out yet?

Marc Lichtenfeld: Not too much. You know, there might be one or two names. And just to be clear, when I get the readout from the system, I’m generally getting, on an extreme low level, maybe five to seven – and on an extreme high level, maybe 25. So right now we’re at about 15 to 17. It’s not like I’m getting tons and tons of stocks. So right now I might see one or two energy names in there, but for the most part, it’s not giving me a whole lot of energy yet… although, personally, I like it. But the whole reason we designed the system is so my biases – or any analyst’s biases who looks at this – aren’t what’s really impacting the decision making. I mean obviously there is a human element to it – there has to be. But we’re letting the supercomputer tell us what is working and what’s going to work.

Steve McDonald: Well I wish I had the answer for you about a top or a turnaround, but this particular system Marc has been running – we’ve been talking about this for how many years now?

Marc Lichtenfeld: It’s been a long time.

Steve McDonald: A long time.

Marc Lichtenfeld: One of the times I remember was in West Virginia. I think it was in 2010.

Steve McDonald: Everybody said the market was going to crash and burn.

Marc Lichtenfeld: Right. And that’s when I…

Steve McDonald: And you said back the truck up.

Marc Lichtenfeld: Exactly.

Steve McDonald: This thing is going to take off. And it hasn’t stopped.

Marc Lichtenfeld: Yeah. Exactly. That was a great call by the system at that point.

Steve McDonald: It really was. But it’s not supposed to make those calls.

Marc Lichtenfeld: Exactly.

Steve McDonald: Well, for a system that isn’t supposed to make the calls, it’s making a lot of great calls. And if it’s saying it’s going to keep moving, I’d listen to it. Marc, thanks so much for being with us.

Marc Lichtenfeld: Sure. Thank you.

Steve McDonald: It’s my pleasure. And for everybody here at the Market Wake-Up Call, I’m Steve McDonald. Thank you so much for being a part of this. We’ll see you next week.

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