Robinhood stock shows that it's never too late to get into a name with room to run.
"There's been so many names I've missed," renowned trader Mark Ritchie II tells Investor's Business Daily's "Investing with IBD" podcast. "They've doubled and then I buy them later and make money on them."
The rally in Robinhood Markets might seem transparent in hindsight, with a potential entry in early May right after its 2025 Q1 earnings. But Ritchie says that shares at that entry point had significant overhead exerting downward pressure on the stock.
He also pointed to an abbreviated consolidation before the stock gapped upward in early May, giving him pause on Robinhood stock. "It's sort of like you're stacking things I don't like on top of each other, and it becomes a deal breaker."
Audio Version Of Podcast
Don't Let Hubris Prevent Your Gains
Ritchie cautions against letting hubris prevent traders from making money on a performing stock. "There's been so many names I've missed," he said. But when he sees a stock that's already on his watchlist, "they've doubled and then I buy them later and make money on them."
He says it's better to get in late than not at all for stocks setting up, even if the gains are modest compared to getting in early.
"The stock doesn't know your name. It's not waving a finger at you saying 'Oh look at how badly you missed me' or whatever."
Playing It Forward: Financing Risky Positions In Robinhood Stock
To help investors move forward with a potential name like Robinhood stock even after missing the initial entry, Ritchie says to build up a cash pool and lean on it to finance risks. "If I'm going to stretch, it's because things are jamming."
When investors are doing well and taking profits in positions that are working, that creates a cushion that Ritchie says investors can use to even out the risk of making modest gains on a stock that's proving itself.
While Robinhood stock was "absolutely viable per my rules," Ritchie said the issues he saw with overhead pressure and a lack of cushion held him back.
"I wasn't seeing the ball real well," he said. But looking back, if things were different, "I'm going to swing a little bit outside of my normal sweet spot, but I'm still in the strike zone."
Follow Mike Juang on X at @mikejuangnews and on Threads at @namedvillage.
