We’re starting off the month of February on a good note. CLS rising 8%, META closing at a record high, APP rising 4% and AMZN gaining 2% today all contributed to our year-to-date gain of 7.7%. That compares to a YTD gain of only 2.7% for the S&P 500.
After the bell, Google announced earnings, and it looks like they missed a bit on expectations for Google Cloud growth. We’ll find out what AMZN says about their AWS cloud growth when they report earnings this Thursday.
CLS surged another 9% higher today, which brings our total gain in this stock to +27.9% in just the 4 business days since we re-purchased shares following their earnings report. This illustrates the point that just because we sold a stock because it fell below our 50-day MA rule doesn’t mean that we can’t buy it again after it meets our buying rules. In this case, CLS re-claimed its 50-day MA last Friday, and the earnings took a lot of risk out of the purchase.
This brings our YTD gain on our portfolio to +8.6%, and our overall 5-month gain to +30.6%.
AMZN reports earnings after the bell Thursday. Remember the rule I wrote about in my “Holding through Earnings” post a week ago? We only hold a stock through the earnings announcement if we have a cushion of a 15% gain or more on the stock. In the case of AMZN, our gain is 34.5%, so we’ll hold it through Thursday.
I hope you’re getting a good understanding of how all this rules-based robo-investing works. As I mentioned, any trading system has to be compatible with your temperament. This system happens to be compatible with mine for a portion of my portfolio. I’m not blazing any new ground here. Trend-following chart-based systems like this have been written about in at least a half dozen technical trading books written by well-known super-investors.
Our portfolio was fractionally in the green for the week - about a 0.4% rise. Not much, but still better than the S&P 500 which was down 0.2% this past week. AMZN declined 4% today after investors went through the earnings report and didn’t like the lowered guidance for next quarter. However, AWS has grown at 19% YoY for 3 consecutive quarters now. It’s a $105B revenue business with fat profit margins that continues to defy the law of large numbers. And analysts were falling over themselves raising AMZN’s price target to $280 and above after listening to the earnings call. CEO Andy Jassy said that AWS would have grown more if they had not been so capacity constrained in the data centers. Which is one reason why capex for Amazon will be $100B this year, exceeding estimates of $75B.
Today’s decline in AMZN was offset by gains in TTD, FOUR and META.
Here’s our equity curve and current holdings. We’re still up over 7% YTD, and over 29% since last September.
Good afternoon. Trade alert - we are selling our position in ONON and booking a 21% profit. The stock has had a good run since our September purchase, but it is now looking more like a Stage 3 stock, having declined below its 50-day MA.
Good morning. Trade alert - we are selling our entire position in TTD this morning, since the stock has responded badly to earnings and is down below its 50-day MA. My bad for not noticing last week that the stock was already below this key moving average. That should have triggered our sell rule, and we could have avoided today’s drop.
Making up for today’s decline in TTD, though is the rise in APP. Investors loved the earnings from last night.
As you can see above, we made 3 trades this week. Two stocks triggered our sell rules: TTD and ONON. And we bought UBER on Monday. Meanwhile, APP gave our portfolio a boost today, gapping up 24% after earnings. APP could be a candidate to enter the S&P 500.
We’re up about 9% YTD. Here are our current holdings. We have about a 29% cash position which is higher than ideal, given how well the market is doing. So will be looking for buying opportunities especially after good earnings reports. Will have a full recap for the week tomorrow.
With APP surging another 8% today, our initial shares purchased last October have almost quadrupled in value. Our portfolio is now at an all time high, having gained 11.5% YTD and 33.4% since we started our swing trading journey a little over 5 months ago. I think Sim 1 deserves to celebrate Valentine’s day today. Here are our current holdings and performance. HAGW!
@rdutt - This is a really interesting exercise. Thank you for posting, and for being so transparent. I do have one question: what is the universe of stocks from which you choose those in a stage 2 uptrend?
I haven’t done the gains and losses of all the stocks that have been in the portfolio, but at first blush it appears that APP is the engine driving your outstanding results. Great work! I hope you will continue with your frequent updates and commentary.
Hi Charlie, our universe is US mid-caps and large-caps. We avoid small caps (< $2B market cap) because they’re not liquid enough and too volatile for us.
Although APP has clearly been a home run, we’ve hit quite a few singles so far - e.g., FOUR, META, and AMZN. We’re not looking to hold stocks for multiple years, but we aim to capture the majority of a Stage 2 uptrend in the stocks we pick. Our techniques are explained in books written by legends like William O’Neill and Stan Weinstein.
Good morning - Trade alert. we are selling our position in FOUR today. The stock has had a great run, and we are locking in a gain of 42% since our purchase. With the stock now below its 50dma, it’s time to sell.
We are also initiating a new position in HOOD (Robin Hood) today. The stock is on a Stage 2 uptrend, and the company reported excellent earnings for the previous quarter.
Good morning - Trade alert - We are trimming our large APP position by 10%. The stock is still trading above its 50 dma, but is now under our higher stop price. Time to take some profits. We will continue to hold 90% of the position, but will be watching 50-dma line.
I’ve been in the beautiful island of Bali this past week, enjoying all the stunning scenery here and just relaxing. Been totally unplugged from what’s been going on in the stock market. Logged in this morning, and we’ve clearly had a rough week. I’ll just post where we stand today, and head back to the beach.
Good morning. Trade alert - we are selling our entire positions in CLS and HOOD due to both having fallen below our stop losses. I’m still in Bali, which explains why I didn’t act on these sooner. Oh well, life in retirement means occasionally enjoying an island paradise without having to have your eyes glued to the market.
