Back To Basics With Joe Fahmy: 4 Tips For Traders

Justin Nielsen (0:07)

Hello, and welcome to another episode of the Investing With IBD podcast. It's Justin Nielsen here, your host, and we're coming to you live at 5 p.m. as we typically do on a Wednesday afternoon. And today is September 9th, 2026 And I am so happy to have Joe Fahmy back on the show. For those of you that don't know, Joe Fahmy, he is a great educator. He's a portfolio manager over at Zor Capital. He also has a website, joefahmy.com, where he does blogging. He's been a long time follower of William O'Neill's methodology and IBD.

So again, he's just taken a lot of those rules and everything that we talk about and really turned it into a successful trading career. Over how many decades now, Joe?

Joe Fahmy (0:52)

It's been 85 years I've been trading.

Justin Nielsen (0:55)

85 years. Okay. Yeah. I knew it was up there, but.

Joe Fahmy (1:00)

I've been trading about almost 30 years now, yeah.

Justin Nielsen (1:03)

30 years. Okay. Well, it's great to have you back on the show, Joe. And I already got in the YouTube comments, someone's saying, well, gosh, a follow through day must be near. Cause for a while there, we were calling you follow through day Fahmy. Cause it just seemed like every time you were on the show, the market would turn. So cross our fingers. We'll see what happens tomorrow.

But how you been, my friend?

Joe Fahmy (1:24)

Everything's good. No complaints. Thanks for having me on. It's always a pleasure.

I appreciate the audience. I appreciate the opportunity. So thanks for having me on.

Justin Nielsen (1:35)

No, absolutely. And let's get right into it. Cause I think at least for me, I'm not gonna try and speak for everyone, but this has been kind of a tough 12 months. There was this period of time in April and May where just everything was working right. You could do no wrong.

The only complaint I had was, why didn't I have more of the stocks that were going up hundreds percent and less of the stocks that were going up a mere 50%, right?

But then, from October until April was very choppy. And then it really seemed like June 5th started what's been kind of a choppy market lately. So it hasn't been easy. So I guess when you have kind of your rough period or it's not even that I'm down that much. It's just a lack of progress. It can be a little frustrating. You start thinking, what am I doing wrong? Do I even belong in this business? But for you, you were kind of suggesting it might be a time to go back to basics. So what does that mean for you?

Joe Fahmy (2:45)

Yeah, it just the best traders and investors, money managers have studied, they understand big picture. They understand where we are in the overall picture. So I think it's important to understand where you are and not get too bogged down with the short term stuff and to just take a step back and sort of four tips or bullet points that can really help people is, number one, determine if the market's healthy.

And then number two, when it's healthy, focus on strong fundamental companies. Number three, use the technicals for entry points. And then the fourth part is manage your trades as best as possible. And this is mainly for traders and people who like to trade growth stocks. But I think it's very important, the first one, to learn to identify when the market's healthy so you know when to sort of, as you mentioned, step on the gas and when to ease up when it's not healthy.

Justin Nielsen (3:40)

Yeah, no, and I guess that's been one of the toughest parts, especially because with the market that we've had lately, one of the things that was particularly interesting is the divergence for quite a while there with RSP, the equal-weighted S&P 500 was up until just a couple of weeks ago at new highs. And it was like, well, that doesn't feel like how my portfolio is doing. So it's kind of like, what's wrong? So it was, you know, and meanwhile, you had, while the RSP was making these new highs, you had some of the high flyers, like your sand disks and your memory chips. You know, those were down 50 percent. And so you have the leaders that really kind of flew in April and May that were getting hammered. But yet the equal-weighted S&P 500 was making new highs. And even the Russell 2000 for that matter, the small caps.

So I guess, what's your gauge of market health sometimes?