I’ve recently been thinking a lot about the day the stock market crashed in October 1987.

You know why…

On Oct. 19, 1987 – Black Monday – the Dow Jones Industrial Average lost 22.6% of its value in a single day.

And ever since Jan. 26, we’ve seen the Dow drop 10%, regain half of that, and then drop and bounce back some again and again.

Back in 1987, I was banking and technology analyst working in San Francisco’s financial district. My boss called me from New York after the market closed on Black Monday to talk it over.

“This is huge,” he told me. “It’s ka-boom!”

I disagreed…

“Hey, this is great news,” I said. “They’re having a sale on Wall Street.”

And that’s how I am looking at the recent “tech wreck.”

You should be, too.

No, this is not 1987. Far from it.

But the fact remains that big tech stocks – all the so-called FANGs – have dropped hard lately. They’re down further even than the overall market.

I made a bundle on cheap stocks back in 1987 – and I want you to do the same with these priced-to-move stocks today.

However, you can’t just head to your broker and put down some “Buy” orders.

You need a strategy – a plan of attack.

So I’m going to show you how to use my unique system to make your own bundle…

Mega-Plus
Your opportunity to buy big tech at a discount isn’t the only good news to come out of all this recent turbulence.

It’s also got Wall Street to say what we’ve been talking about for years now here.

I’ve lost count of the times over the last few days that I’ve heard an analyst tell the media that tech is the linchpin for the entire U.S. economy. Indeed, virtually every business out there needs the digital platforms that grow sales and improve profit margins.

That alone makes this is a great buying opportunity for savvy investors armed with just the right strategy – the right plan of attack – for turning selloffs into profit bonanzas.

Make no mistake. Each member of the FANG Plus group is a great company. We’re talking Facebook Inc. (Nasdaq: FB), Amazon.com Inc. (Nasdaq: AMZN), Netflix Inc. (Nasdaq: NFLX), and Alphabet Inc. (Nasdaq: GOOGL) – plus Apple Inc. (Nasdaq: AAPL).

These companies are behind advanced chips, online streaming, social networking, cloud computing, e-commerce and mobile payments, online search, and productivity software – not to mention artificial intelligence, Big Data, virtual reality, and streaming music.

Plus, most of these companies have moonshot labs where they’re working on stuff like driverless cars, balloon-powered universal internet, and typing with your brain.

Just holding these five stocks is like owning the world’s best technology fund.

And remember, there’s absolutely nothing wrong with the fundamentals of any of the FANG Plus.

Just look at Facebook…

When Controversy Hits
Facebook is off 20% from its highs mainly because of a controversy about how it sold user data – not user IDs – during the 2016 presidential election.

That has some investors worried that Washington might try to rein in the social networking leader.

While Congress will certainly spend some time grilling Facebook CEO Mark Zuckerberg – and rightfully so – I doubt anything will come of it. And even they were to pass some form of legislation, I firmly believe the courts would strike it down as an abridgment of free speech.

Amazon is another example of a stock hurt by controversy, with shares off nearly 14% from their recent high.

Of course, I’m talking about President Donald Trump’s recent Twitter rampage, blaming Amazon for running brick-and-mortar retailers out of business.

He also alleges that Amazon is taking advantage of the U.S. Postal Service’s cheap shipping rates to pad profits. Never mind that other shippers also use the USPS for the last mile journey to your home – or that Amazon doesn’t set those rates (it just takes advantage of them).

Here’s what the president is missing. Amazon now sells products for thousands of small businesses that would never have access to global markets without this king of e-commerce. So, Amazon has actually been a boon to mom-and-pop shops all over America.

Now, like I said, it’s not the time to just buy a lot of tech stocks with hopes of boosting your portfolio’s gains.

So here’s your plan of attack…

Cowboy Up
I believe my unique Cowboy Split system is tailor made for just this kind of market.

Here’s how this “split entry” system works.

If you’re doing a traditional Cowboy Split, you buy one-half of your usual investment “stake” – if you usually buy $1,000 worth of a stock, you buy $500 worth – at market. Then you put in a “lowball limit order” to pick up the second half stake if the stock dips.

To help you better understand this defensive but profitable move, let’s walk through two examples.

Let’s say you have your eyes on XYZ Tech Corp. The company is in a hot growth sector, has great financials, and has a solid chart – and it’s selling at $25 a share.

Let’s further assume you want to own XYZ for the long haul. You can use the Cowboy Split to buy on the dips – and increase your overall stock profits.

You start by investing half of your standard stock purchase – like I said, invest $500 if you’d usually invest $1,000 – at market ($25 a share). As soon the market order fills, you then enter what’s called a “lowball limit order.”

You tell your broker that you want to buy a second half tranche of XYZ at a much lower price. A 20% discount is a great rule of thumb for filling the second half of your Cowboy Split.

You then enter a “limit order” for the second round of XYZ at a price of $20 or lower. If the stock falls to that price, your order automatically fills, and you now have an average purchase price of $22.50.

Once XYZ resumes its climb, you have baked in extra profits. For instance, when XYZ hits $30 a share, your cumulative gains are now 33.3%. ($30 minus $22.50 divided by $22.50 times 100 equals 33.3%.)

Had you simply bought the stock at $25 and held, your returns would have been just 20%. ($30 minus $25 divided by $25 times 100 equals 20%.)

So, the Cowboy Split increased your profits by more than 50%.

Let me be clear about one thing. If the stock doesn’t correct and your lowball limit order doesn’t fill, that’s perfectly fine.

No, you didn’t increase your overall gains, but instead you got portfolio insurance for free.

The Robinson Variation
There’s a twist on the standard Cowboy Split that many pro traders employ.

Instead of halves, you cut your entries into thirds. Traders often do this because they want to pick up more shares at a discount but don’t expect a reversal of more than 10% or so.

Once again, let’s say XYZ is selling at $25 a share. You put in an order for one-third of your standard position ($333 if you usually invest $1,000 in a stock), and then put in two lowball limit orders. The rule-of-thumb amounts with this twist on the Cowboy Split are a 10% discount on the second tranche and a 20% discount on the third.

If the second two orders fill, then you once again would build in extra profits when the stock resumes its climb. And if XYZ climbs to $30, your return would again be 33.3%. ($25 plus $22.50 plus $20 divided by 3 equals $22.50… $30 minus $22.50 divided by $22.50 times 100 equals 33.3%.)

Indeed, the Cowboy Split is a powerful plan of attack. It lets you plan defense – and make even more money – when a bull market turns choppy as it has in the last couple of weeks.

With this approach you definitely won’t get left on the sidelines once things start rising again.

So if President Trump goes on another Twitter offensive against a great teach leader, you know just what to do…

Deploy the Cowboy Split – and rake in the cash.

— Michael A. Robinson

Source: Strategic Tech Investor