As I will discuss in greater detail in the August 23 issue of Personal Finance, investing in the stock market has become an event-driven exercise that can reverse the fortunes of a company in a matter of minutes. Case in point: Tuesday, August 1 when three of our holdings exploded in value after reporting better than expected quarterly earnings results.

Within an hour of the stock market’s open that day, I issued three separate sell alerts for Vale S.A. (VALE), IPG Photonics (IPGP), and Credit Acceptance Corp. (CACC) for annualized gains of 179%, 115%, and 110%, respectively. What had started out as a fairly lackluster week quickly morphed into the best single-day performance in the thirteen-year history of our Rapid Profits Matrix. I’d appreciate it if you’d take a few minutes to share with me how you profited from these trades, and how we can make this service better for you.

That day was a lot of fun, and hopefully, I’ll get a chance to break that record in the future by posting four triple-digit annualized gains in a single day. But that may take a while, so in the meantime, we will stick to our proven approach of buying stocks that our RPM believes are ripe for a rally and be opportunistic about cashing in when an unexpected event delivers the type of gains we are expecting.

Those of you who regularly read my MarketWatch articles in Personal Finance know that I am expecting a stock market correction later this year. Not a crash, since the economy is strong and a recession is not in sight, but a 10 – 20% decline in the overall market due to an event that convinces investors that equity prices are too high. It could be geopolitical, could be economic, or could be something else altogether that temporarily scares short-term investors out of the market.

They haven’t shown much fear lately. The S&P 500 Index increased by nearly 2% in July to bring its total gain for the year up to a little over 10%. Unfortunately, that also raised its PE Ratio to 24.7 which is its highest monthly reading since November of 2009. That doesn’t necessarily mean that a correction is imminent, but it does suggest that any unexpected bad news could send it tumbling.

Although patience is a virtue, it can be an expensive virtue in a market as overextended as this one so I am quick to close out a position that has met our target return on the upside (such as the three earlier this week) or triggered our stop loss limit on the downside (such as OME last month). We currently have seven positions in our Open Trades portfolio as of today, five of which (as of today) are trading beneath their buy limits and four of which have more than a month remaining in their target hold periods.

Self-storage REIT Jernigan Capital (JCAP) is now our longest-held position, with one week left in its target hold period. The company released its second quarter earnings report after the market closed on August 2, which came in better than expected. The stock got a mild boost as a result, but JCAP has still not recovered from its secondary offering six weeks ago that diluted its performance metrics. I think JCAP deserves a better valuation than this, so don’t be surprised if I extend this trade next week for another month.

The other trade we opened in May for Bank of the Ozarks (OZRK) has also run into some turbulence recently after the company’s CLO (Chief Lending Officer) suddenly resigned last week without an explanation. It didn’t take long for short-sellers to drive its share price 10% lower, converting our 5% gain into a 5% loss in a single day. Since then its share price has risen gradually, but I will probably close this position out when its target holding period expires on August 20 given the uncertainty regarding the reason for their loan exec’s departure.

Of the four positions I opened in June, only United Therapeutics (UTHR) remains in our portfolio thanks to this week’s selling frenzy. We had a modest gain in this holding until the company released its second quarter earnings report on July 27. Although revenue increased by 8% over the previous year, the company took a $210 million “estimated loss contingency” charge for a settlement it is negotiating with the DOJ regarding unfair sales practices that wiped out a big chunk of its net income. We still have more than two months left in our target holding period, and any positive news regarding the resolution of this matter should push UTHR’s share price considerably higher.

We opened four new positions within the past month, beginning with Ensco plc (ESV) on July 11. Two weeks later we got a nice pop out of it when the company released its second quarter results that were better/less bad than expected/feared. Like most energy stocks ESV has become a de facto proxy for the price of oil, and being an off-shore driller means its breakeven point for profitability is higher than it is for most land-based extraction operators. The good news for ESV is the price of oil has jumped nearly 10% during the past month, sending its share price above its 50DMA today for the first time since February.

On July 19 I opened a new position in investment banking firm B. Riley Financial (RILY), which is digesting the recent acquisition of FBR Capital. The stock got a mild boost this week when the company announced a new IPO deal that FBR will manage. RILY is perhaps the most event-driven stock of all of our holdings given its purely transactional nature, so I expect to see it move incrementally higher over the remainder of its target holding period as more deals of this sort are announced.

I added Bank of New York Mellon (BK) to our portfolio five days after it released second quarter earnings on July 20. Nothing much has happened with it since then, but I’ll have more to say about it in next month’s report.

And even though we’ve owned Bojangles (BOJA) one day less than BK, it is already up 3% after issuing a strong second quarter earnings report on July 27. If you’ve ever eaten at a Bojangles then you know it isn’t attempting to compete with all the new organic/farm-to-table hipster restaurants that seem to be popping up everywhere, and that may be to its advantage. I’m not sure where to go when I’m in the mood for eating something healthy (which isn’t often), but I know exactly where to go when I’m craving some fried chicken and biscuits!