HX Weekly: June 16 - June 20, 2025

Hello reader, welcome to the latest issue of HX Weekly!

So, what's HX Weekly all about?

Each Friday, we bring you a new edition of HX Weekly that includes three distinct sections.

In the first section, Thoughts on the Market, we'll offer insights into current economic and market news.

In the second section, HX Daily Redux, we'll revisit investing concepts, tactics, and more from past issues of HX Daily.

And in the third section, Market Wizard’s Wisdom, we’ll share thoughts, quotes, and theories from the greatest investing minds of all time.

Now, let's dive in!

I: Thoughts on the Market – What the News Isn’t Telling You

Turn on the TV or check the news right now, and all you’ll see is talk of Israel, Iran, and the risk of a bigger conflict.

Oil prices are jumping. The S&P 500 has slipped. The fear is thick — and many people are wondering if this is the start of something truly serious.

But here’s what the headlines miss: we’ve seen this before. Many times.

When there’s a surprise event — an airstrike, a missile launch, a military leader taken out — markets often swing hard.

Oil spikes. Defense companies soar. The rest of the market stumbles as everyone braces for the worst. But then... calm returns. The panic fades. Stocks recover.

Why? Because these shocks usually don’t last. Fear moves markets fast, but reality catches up.

Once the drama passes, investors remember what really matters: company profits, not breaking news.

Don’t believe us? Just look at the last decade.

Russia’s move into Crimea scared the world in 2014, but the market finished that year strong. North Korea fired missiles in 2017, yet stocks posted huge gains.

The U.S.-China trade battle rattled nerves for two years (2018-2019), but the market powered through. Even after the killing of Iran’s top general in 2020, markets dipped for just days before racing to new highs.

And while Russia’s 2022 invasion of Ukraine shocked the globe, U.S. stocks found their balance soon after.

Middle East conflicts? Same story — brief market bumps that fade fast.

So why do markets keep bouncing back?

First, traders often expect the worst, but cooler heads usually prevail.

Second, most big U.S. companies aren’t affected by these global fights — their businesses keep going.

Third, “buy the dip” has worked for years, so when stocks drop on fear, smart money sees opportunity.

What should you do now?

First, stay grounded.

And as we often say at HX Research, ignore the noise!

Be sure to watch how investors, not news anchors, react. When stocks take a sharp dip on world drama, it often sets up a sharp comeback.

At this point, don’t waste your time with defense stocks and oil. Those ships have sailed, and any gains will deflate once the crisis eases.

Instead, look at your personal watchlist and other quality companies for opportunities.

Has a big name like Amazon taken a dip for no reason? Did that share price of that high-flying growth company you’ve been wanting in on get clipped?

If so, buy that dip! In situations like these, high quality companies will rebound quickly once the fear dies down.

In the end, headlines may scare, but profits are what really matter.

If the conflict doesn’t damage corporate earnings, these selloffs usually pass quickly.

Be patient. Stay sharp. And when the crowd panics, that’s when you make your move…

II: HX Daily Redux – Investors Focus on Price, But Time Is Just as Important

Today, we’ll revisit an HX Daily post from April 2024 titled "Investors Focus on Price, But Time is Just as Important.”

We’ve all been there, you buy a stock, and it almost immediately loses value, sometimes a lot of value.

For some reason, we stubbornly hold onto this ticker, because we can’t stand the thought of losing our money that quickly.

Today’s “Daily Redux” post addresses this investing dilemma head-on. We hope that you enjoy it!

When looking at stocks, the first thing we always talk about here at HX Research is the price.

That makes a lot of sense. The price is what you pay for a stock. It's also what you sell it at... and, therefore, the deciding factor on whether you make money on the trade.

But when thinking about how stocks trade, it's critically important to understand the role of time.

While we often frame the question as "where" – meaning at what price – would you buy or sell a stock, market participants' buying and selling actions are often driven by the passage of time rather than specific prices.

Think of it like this...

Let's say you have a significant position in a stock. It's one of your most prominent positions.

One day, the stock trades down 15%, a big move lower. But you hold off on selling because if you liked it where it was when you first bought shares, you should want it even more now at a cheaper price. Then, the next day, the stock stabilizes and proceeds to go up slowly after that. You're unlikely to sell this stock even though you're down 10% or more.

Now consider the same stock, but say it goes down 1% in one day. The next day, it goes down another 1%. It proceeds to do this for a week. Overall, you'd be down less than you were in the first example... but how do you feel about the stock now?

There must be something wrong since the stock has gone down for so many days, right? The chances of selling at least some of your position are much higher, as you've had multiple incidences of negative feedback.

It's often not the magnitude (the price) of the negative feedback that influences our actions on a stock as much as the quantity (the time) of that feedback.

In the past, we have discussed sector "rotations." This is when too many investors have crowded into certain positions, leaving them vulnerable to being forced out of those positions.

We've also used the example of a crowded raft. With too many people on one side, the raft is vulnerable to a tiny rapid sending it everywhere.

The thing about people moving from one side of the raft to the other, though, is that it seldom happens quickly... Especially the longer it takes for the raft to get crowded in the first place.

Think back to what happened in 2021 with the COVID-19 "winners" – both high-growth ones like Zoom Video Communications (NASDAQ: ZM) and defensive ones like Procter & Gamble (NYSE: PG) – benefitted for the better part of nine months in 2020. Still, it took almost a year for that to unwind.

While the defensive stocks have mostly recovered, the higher-growth and higher-valuation ones like Zoom and Peloton (NASDAQ: PTON) have never returned.

When entering one of these correction periods, focus less on the price than the time.

The corrections will almost always take several months (45 to 90 days is my easy rule) to run their course.

This most recent correction in the tech-heavy Nasdaq Composite Index began in late March, so it is not even 30 days old.

Again, go back to the earlier example, if you lose a bunch of money quickly on a position but then it recovers, the drop doesn't feel so bad.

When you lose money for a longer stretch, you begin to lose your conviction.

Understanding the bigger picture and time's role in these corrections can convince you to turn them into money-making opportunities.

Also, picking the right stocks during these periods – as we've done here at HX Research – can also be highly profitable.

III: Market Wizard’s Wisdom - Mark Minervini

For this week’s “Market Wizard’s Wisdom” we thought we’d share a piece we published last December titled “A Quotable Market Wizard – the Wisdom of Mark Minervini.”

Enjoy!

As a professional money manager for decades, I spent most of my time researching our positions directly. I read hundreds of pages of research about stocks, the market, and the economy every week.

My knowledge grew over the years as I studied these different industries and companies. My skills as a money manager also improved over that time.

What didn’t grow much was my WISDOM. I was too busy actively managing money to work on getting wiser.

Since I came over to the newsletter business half a decade ago, this all began to change. Now, I can turn my focus from individual companies to my larger process as a trader.

As part of that learning process, I discovered several writers that were new to me.

Mark Minervini is one of the most influential on me – and my process.

Mark is a professional trader highlighted in Jack Schwager's book Stock Market Wizards. If you have never read that book, order it today!

Mark has a tremendous track record as a trader, but his quotes are even more impressive.

He is the most quotable trader that I have ever encountered.

If you are unaware of his work, I encourage you to follow him on X/Twitter and benefit from his wisdom.

In the meantime, here are some of our favorite quotes from Mark. Enjoy!

The key to winning successfully is figuring out how to manage and learn from your losses.

Sometimes you will win because of luck, but that doesn't improve your process. If anything, it can set back your learning curve.

Focus on your losing to increase your winning.

One of the great things about Mark is not just his trading wisdom but his life wisdom.

We think many of the lessons needed for successful trading can also make you better in almost any aspect of your life.

This is one of the most important aspects of investing, and it is difficult for inexperienced investors to accept.

We often point out that every stock that ever went up tenfold first had to double and triple.

Buying stocks that are up – and in an uptrend – is how you make money in stocks.

Those who have followed us over the years know our favorite saying about trading – Plan the Trade, Trade the Plan.

Having a well-thought-out plan is the key to being able to do with the markets as they develop. Remember that the markets are constantly evolving; the key is how you react to those developments.

Probability is everything in trading. There are no guarantees in the markets.

The key is finding high-probability bets and stacking them on top of each other in your portfolio.

If your process is good, those probabilities will eventually play out, and you will make money in the markets.

We hope that you’ve enjoyed this week’s issue of HX Weekly…

Do you have any thoughts, questions, or feedback? Tell us more in the comment section or at [email protected].