5Mon·

Being proactive can pay off!

As most people here know, I am a very active trader and buy and hold is not really my thing.

I would like to share with you today a concrete example of how this can also make sense within a sector.

I recently sold my position in $BE (-6.99%) and immediately used the profit $FCEL (-2%) directly with the profit. Not because $BE (-6.99%) suddenly a bad company, but simply because I saw more potential in the short term in $FCEL (-2%) saw even more potential. After 100% in 2 weeks, the air is getting thinner after yesterday's 30% rise.

Are any of you still invested?

22 Comments

Donkey Diktator@DonkeyInvestor

5Mon

Nein 👍

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Chris@Multibagger

5Mon

@DonkeyInvestor well then I'm glad that I'm proving myself wrong. And that's what it should be about for everyone. I don't need or want to convince anyone here. I feel very comfortable with my approach. That's what counts! I therefore think this blanket statement (NO) is wrong. It really depends on what you want to achieve and what makes your own investor heart tick. But I agree with you that for 90% of investors time in the market beats time the market is the right approach.

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Schmon@SchmonInvest

5Mon

@Multibagger I think he meant that he is not invested

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Chris@Multibagger

5Mon

@SchmonInvest OK, you may be right.😉 It's still relatively early.😂

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Chris@Multibagger

5Mon

@DonkeyInvestor sorry, I must have misinterpreted your no. 😉

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Ella M.@DividendenWaschbaer

5Mon

@Multibagger That doesn't matter at all. The donkey also regularly misinterprets itself.

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Donkey Diktator@DonkeyInvestor

5Mon

@Multibagger exactly. I simply answered your question as to whether I'm invested 😅

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Donkey Diktator@DonkeyInvestor

5Mon

@DividendenWaschbaer if I misinterpret myself, I am suddenly a raccoon

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Ella M.@DividendenWaschbaer

5Mon

@DonkeyInvestor which would be a good thing. But since you don't do good things, you must have misinterpreted it

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Donkey Diktator@DonkeyInvestor

5Mon

@DividendenWaschbaer you must have misinterpreted that

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Wealth-Accelerator@Wealth-Accelerator

5Mon

With my single stock momentum model for the MSCI World, I have been invested in $BE as one of the five stocks with the strongest momentum since April 1. Since then +130%. My current expectation is that $BE will remain among the TOP stocks in the algorithm for some time to come.

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Chris@Multibagger

5Mon

@Wealth-Accelerator Did you develop this model yourself? How often are the shares reviewed? Which stocks are still in your top 5?

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Wealth-Accelerator@Wealth-Accelerator

5Mon

@Multibagger Krush inspired me to create this model. He runs the Top2 model for the S&P500. We exchange ideas on this from time to time.
I then tried to derive a larger model with the S&P Global 1200. But it took me a lot of effort to obtain the relevant data for a reasonable backtest for the MSCI World. So that became my universe. My focus was on finding a solid net return, i.e. minus transaction costs (incl. spread) and capital gains tax. This meant that there could not be too many transactions.
The model is always reviewed on a monthly basis at the turn of the month.
Once the stock with the highest momentum is picked from all the stocks in the universe, once the TOP4 from the market capitalization deciles 8-10 (large and mega caps) and once the TOP3 from the deciles 7-9 (large caps).
This usually results in deliberate overlaps, with an average of 5 stocks being held.

Currently:
$BE
$285A
$WDC
$LITE
$CIEN

What is exciting:
MSCI has a certain intentional lag in its indices to avoid constantly recomposing the indices. As a result, $SNDK is still included in the MSCI World Small Cao Index. On closer analysis, however, it has already arrived in decile 10 of the world. A change of index is therefore imminent. I recently wrote a short article about this. It is possible that ETF providers will have to buy SanDisk in bulk in the near future. I don't know to what extent the market has already priced this in

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Christoph@Mondi

5Mon

@Wealth-Accelerator super exciting, thanks for the insights!

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Chris@Multibagger

5Mon

@Wealth-Accelerator But the indices that focus on small caps have to sell instead, don't they?

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Wealth-Accelerator@Wealth-Accelerator

5Mon

@Multibagger Yes, exactly. But the total volume of MSCI World ETFs is significantly higher than the volume of small cap ETFs. This means that a small sale should be offset by a huge purchase. Or am I making a mistake?

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Schmon@SchmonInvest

5Mon

How do you come up with the titles? I always click on them and think to myself, I've never heard of the company. It's crazy

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Chris@Multibagger

5Mon

@SchmonInvest If you want to trade successfully away from the blue chips and achieve outperforming returns, you have to look away from the current mainstream themes. I think it's clear to everyone that energy and cooling will become the mega topic with the whole expansion of the data center boom, which in my view is more likely to limit the boom than chips or memory. So it was actually clear that alternatives were needed. And then the idea of hydrogen was not so far away. The same applies to the space sector. The mammoth IPO of SpaceX has really brought it into focus. Logically, other companies in the sector then also come into focus. But of course it has to be clear. The risk of investing there is many times higher than the blue chips. The stocks are highly volatile and an entry at the wrong time can quickly mean a loss of 30-40%.

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