A trader named Oliver Kell is creating a buzz in the investing world after winning the 2020 U.S. Investment Championship with an annual 941 percent return – a return almost twice that of his closest competitor. That eye-popping number has earned Kell many interviews and a lot of coverage in digital and print media.
So how did Kell develop this strategy that enabled him to make such big gains?
Oliver Kell’s Background
In interviews, Kell reveals he worked in the finance industry, learning how to fill large orders and working on a diverse set of investment strategies. The experiences showed him, he says, what is reasonable in a particular market context and what might not be worthwhile chasing, as well as revealing a lot about the mechanics of trading, such as the importance of liquidity in trading.
Kell also talks about the importance of persistence and endurance needed for a trader to emerge victorious over the markets. While trading for 10 years, he says, he made no money for the first six years. The former athlete often talks about trading as a “grind” and a discipline that requires patience and determination.
2020 and Kell’s Timing Strategy
In public interviews, Kell also reveals a big point that is a major factor in his success in 2020.
It turns out that Kell had a lot of ‘dry powder’ or free capital on the sidelines in 2020 as the pandemic impact moved the market in big ways. Indicating that he was “all cash” at that time, Kell has told reporters that he was able to move that money into the market at a time when gains were explosive.
Kell has also shared some of his best movers, including Livongo Health in the healthcare sector. He notes that his astute analysis of healthcare stocks has been a key component of his success.
Kell also invested in Tesla, which provided enormous returns and Peloton during its heyday. At the height of the pandemic when “remote living stocks” posted big gains Kell rode the trend higher. With Tesla, specifically, Kell’s intuitions matched those of Cathie Wood, who saw the electric car company as a disruptive innovator.
In explaining more of his approach to the markets, Kell often cites his background as an athlete.
His football training, he says, enabled him to prepare for trading, where competitive spirit is important and hard work is part of the deal.
In that sense, Kell cites some pretty simple principles as informing his trading strategy. Some of them sound similar to the recommendations of Warren Buffett, who has often talked about investing based on values. Buffett’s contention that big-name companies offer stable growth, for example, seems to fit with Kell’s intimations that trading is not based on some obscure knowledge of esoteric stocks, but more akin to broader market research.
“There’s a lot of work that goes on behind the scenes, in making sure that you’re prepared and you’ve built your strategy over time,” Kell tells Richard Moglen on youtube, talking about sports as good preparation for the reality of trading. “Similarly, (in sports), you can work your tail off and lose the game. Trading can be just like that: maybe you’re playing well, but you’re just not winning games. You kind of have to know how to deal with that emotionally.”
Kell emphasizes the importance of hard work that must be done to research and perform due diligence. He can’t over-emphasize enough the importance of psychology in preparing to go to bat in the markets.
In the end, Kell’s strategy seems to be largely supported by consistency, patience and discipline. He’s quick to tell newcomers that nothing is assured in the market – that a trader can work very hard on a particular equity or strategy and still lose out due to the “random walk on Wall Street” analysis that has always been part of the professional’s outlook since its popularization by Burt Malkiel.
He’s a keen observer of relative strength: “I look for stocks that hold up the best during a correction, stocks that don’t want to go down,” he says.
However, being able to move cash into equities at a major market inflection point is part of what springboarded Kell’s portfolio to enormous success in 2020.
That and a tenacity that he inspires others to have. Kell’s story shows how trading can lead to astounding successes and provides some trail-blazing for newbies who want to perfect their trading skills.
For traders who want to emulate Kell, he has a book at his own website describing his journey which is chockfull of technical patterns, from bull flags to bear flags, cup-and-handles, and much more with analysis of actual positions. It’s a must-read for any serious trader wishing to emulate the returns of this champion trader.