- Evan Buenger — a US Investing Championship hopeful and CEO of Buenger Capital Partners — ensnared a 131.9% return through August of 2020.
- He utilizes both fundamental and technical analysis to formulate opinions of a stock, and either confirms or dispels his thesis by consulting the global macroeconomic backdrop.
- Buenger learned the art of investing from studying the methodologies and strategies of legendary traders.
- He is occupies fifth place in the 2020 US Investing Championship.
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While most adolescents are busy arguing over curfews, causing mischief, and playing video games, Evan Buenger — a US Investing Championship hopeful and CEO of Buenger Capital Partners — focused his attention elsewhere: the stock market. A mixture of curiosity and fascination drove his desire to decode the market's unknowns.
"I think for my 11th birthday, I got a Wall Street Journal subscription, which is really pretty different for an 11-year-old," he told Business Insider. "And so, I would study a lot of these great investors that got a lot of media coverage."
Interviews stemming from Paul Tudor Jones, Stanley Druckenmiller, and George Soros were frequently devoured throughout Buenger's formative years, helping to mold his investment framework and philosophy. Although it was bit difficult to grasp and a tad taxing at the time, Buenger learned the importance of macroeconomic underpinnings as it relates to an investment strategy. It's a facet of his investing style that still resonates today.
From that point on, Buenger's investment approach continued to evolve as he became familiar with an array of time-tested, technically based strategies and concepts from trading legends like Mark Minervini, William O'Neil, and David Ryan. He'd borrow bits and pieces from each, test them in real time, and keep what worked.
The lessons that Buenger absorbed from macro legends and technically focused market wizards would eventually metamorphose into his strategy of choice. Moving forward, his trading would encompass a conglomerate of fundamentals, technicals, and macroeconomics, each playing a distinct role.
Today, it's safe to say that Buenger's studious, well-informed background paid off. His trading performance as of August 31 was an extraordinary 131.9%, putting him in fifth place in the 2020 US Investing Championship.
Here's how he's doing it.
A distinct spin on a classic strategy
At the center of Buenger's strategy lies William O'Neil's famous CANSLIM methodology.
For the uninitiated, O'Neil leans on (C)urrent earnings per share, (A)nnual earnings per share, something (N)ew, (S)hares outstanding, and (L)eaders or laggards to pinpoint the select few stocks that look set to explode higher.
"It's mostly CANSLIM based," he said. "So I guess I'll start by saying I'm mostly technical. I use fundamentals in the sense that I will use them to screen for what I'm looking for."
Ultimately, Buenger is searching for stocks with a mixture of both strong sales and earnings growth. In doing so, he's able to whittle down the pool of issues he's willing to bet on. As far as fundamental analysis is concerned, that's about as far as it goes.
Now, it's time for technical analysis.
"So at this point it's basically a fundamental stats screen," he said. "And then that's my universe of stocks. Then I do a relative strength screen to see which stocks have the best relative strength at that time."
Buenger's assessment of relative strength allows him to pinpoint the stocks that are performing with force and fervor. He knows he's trading into a tailwind if a stock meets this criteria.
From there, Buenger lets the charts and technical analysis do the talking.
He's looking for flat bases, consolidations, cup with handles, Elliot Wave patterns, and pull-back buys. In doing so, he's (hopefully) identifying a setup that has the potential to move higher.
If the fundamentals check out, and the technical aspects look enticing, Buenger will consult the macroeconomic backdrop to either confirm or reject his thesis. If the stars align, he'll pull the trigger.
Today, with interest rates on the floor and the Federal Reserve purchasing assets at a rapid clip, Buenger finds the environment favorable.
When Buenger's trades are working well, he's not afraid to amplify his returns by using margin. Just recently, he went from about 150% invested (the extra 50% stemming from margin), to 20% to 30%. It all depends on how his trades are acting and the broader market action he sees in the background.
As far as risk management is concerned, Buenger plays his cards close to the chest. Generally speaking, he places tight stop losses around his trades, and will usually scale in and scale out of positions to limit his risk. A typical stop generally falls between the 2% to 4% range.
"I kind of wanted to keep myself accountable," he said in reference to his reasoning behind joining the competetion. "I don't want to say that I'm not driven, but there's just something about competing that makes most people want to do better and want to put in more work."
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