Well that rounds out the 10-part series! But it is fairly fun, so I think I'll continue to do it. We hit this milestone on a SGT Friday night, no less, ready to go into the last trading day of the week!
This clip mentioned an idea of back-testing. And I find this was actually helpful before I first entered my position. Back-testing allows me to verify my hypothesis.
Scrolling more, I discovered another channel Sully's Advice which may be useful to learn Risk Management
Risk Management
- Win Rate Strategy - win 8 of 10 trades. But 1:1 risk:reward ratio.
- Risk:Reward Strategy - 1:2 ratio, win 5 of 10 trades.
Dude did 3 year back-test, usually going for 1:2, but sometimes 1:1. So it seems like having a strategy, testing it before applying would be very useful.
Portfolio Distribution
For this, I read that ideally you don't want to have more than 2% in a single stock. But is that different for Magnificent Seven?
Part 11: Temperance
This is a short update so probably just write it here. I think it's prudent to wait out before trying to buy in. Maybe:
- Backtesting further
- Learning new strategy
Might help. But for today, let's wait for the market to do its thing, which is, only buy in after a green 1% up bar appears from the minimum point. Along with StochRSI and MACD indicators. Still have my eye on GOOGL and TSLA
Part 12: Back-testing Pelosi'$ trades
It seems considering the prices she buy and sell, for normal stock trade is poor. I did this comparing the announced trade dates and volumes of her / spouse. Then I checked the price of the stock on those days and calculated her annual returns. Generally it does a lot poorer than S&P.
Part 13: Tesla(?)
Instead of finding one video that dives into the fundamentals of Tesla, I found one that talks about fundamental analysis of stocks in general. At least from this video, his stock picks have 80% moon success rate! Here are the 10 key areas he scores over 100:
- 3Y Revenue: grow (10)
- Net Profit Margin: > 10% (10) / 5% (5) / less (0)
- 3Y Cash: increase (10)
- Assets to Liabilities
- Cash:Debt
- Short Interest: < 5% (10) / <10% (5) / >10% (0)
- Institutional Shareholding: >50% (10)
- Scalability: revenue > expenses growth
- Stock since IPO
- P/E ratio: >30 (0) / 10-30 (5) / <10 (10)
| Stock | TSLA | PLTR | TEM |
|---|---|---|---|
| 3Y Revenue | increase abit (5) | 20% increase (10) | good (10) |
| Net Profit Margin | 7.30% (5) | 18% (10) | -116% (0) |
| 3Y Cash | Reduce (0) | Doubled (10) | bad (0) |
| Asset to Liabilities | 3:1 (10) | 5:1 (10) | bad (0) |
| Cash to Debt Ratio | >1.0 (10) | very high (10) | bad (0) |
| Short Interest (to float) | 2.26% (10) | 4.13% (10) | 13.28% (0) |
| Institutional Shareholding | 47.74% (5) | 52.16% (10) | 34.57% (0) |
| Scalability (Revenue > Expenses Growth) | 7B (5) | good (10) | good (10) |
| Stock since IPO | 350 times (10) | 12 times (10) | 2 times (10) |
| P/E Ratio | 177 (0) | 589.94 (0) | N/A |
| -- FINAL SCORE -- | 60/100 | 90/100 | 30/100 |
Part 14: Random Tips
- Backtest (a month, at least, to see if your tips work)
- Patience is queen - takes time and money to learn. Takes 6 years of study to become a doctor to earn 10k/month!!
- Market Structure: ABC - zigzag up or zigzag down
- Fair Value Gaps https://www.youtube.com/watch?v=e7ViDziObKI
Next: craft a strategy, backtest for February 2024, top 3 stocks
Part 15: Backtesting GOOGL
Consider again my entry strategy:
- first bar clear off lower BB
- oversold conditions (StochRSI < 20)
Let's see how google does ...
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