Jul. 19 at 2:33 PM
$SPY $QQQ $NVDA $AAPL $TSLA
For those interested, below is how I invest. Anecdotally, I can say that my returns when I changed how I approached investing has made me massively more money.
The framework I use is based on my studies of elite traders who have built fortunes in the stock market.
Basically, what I do now is look for structural trends within the market that I can ride through the greater part of their moves.
If I can be right about the structural move, my biggest task as a stock operator is to have the emotional discipline to manage the campaigns (I use the term campaigns rather than trades) through the volatility.
From my experience, that is where the big money is made.
In addition, I am not against adding 'trading shares' in these companies that can be acquired during drawdowns as long as the structural uptrend is still in tact and the longer-term line of least resistance is higher.
These trading shares can be sold for profit when the aggregate market, the sector or individual stocks get extended (me and the people I work with monitor charts constantly to determine those situations).
While position sizing can vary depending on the near-term line of least resistance in the overall market, the sector or the stock, IMHO the key is to have the emotional mastery to hold the core position without trying to time tops and bottoms.
In my opinion, picking tops and bottoms in a really tough game and you often risk missing the greater move if you don't time it correctly.
That is why I say if you want to partake in that exercise then use trading shares and not your core positions.
In the case of the current AI cycle, me and my partners have advocated holding core positions in key names we have identified and the key "tell" as to whether or not the structural trend remains in tact is the capex spending of the bigger companies.
This is something we monitor rigorously and with great vigilance because when that spending decelerates then the overall thesis changes and the structural trend is invalidated.
At the end of the day the following quote attributed to Jesse Livermore substantiates this approach:
"It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!...I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon.”
Just my 2 cents.
Warmly,
DC77
