patrick.net

https://markets.businessinsider.com/news/stocks/best-performing-sp-500-stocks-2019-amd-target-highest-gains-2019-12-1028786555#10-leidos-holdings2

Advanced Micro Devices was the best performing stock on major exchanges in 2019.

OK then, they best you could have done was AMD:

Performance: up 150.7%

So your $10,000 at the beginning of 2019 would have been $25,700 at the beginning of 2020.

Not bad, but I assumed there would be some solid triples and higher.

Patrick, I think one should invest based on the "100 minus their age" rule.

A 60 year old should have 100 minus 60 in the stock market, or 40% in stocks (S&P 500 index fund, ETF's, Facebook, Goldman Sachs, Disney, etc.). The remainder 60% should be in investment grade bonds, I series savings bonds, and certificate of deposit.

I recommend Vanguard's Lifestrategy Funds like its Moderate Growth Fund.

Patrick, interesting topic.

My portfolio was up 28% in 2019. S&P500 was up 29%.

Although I am diversified, I do own a significant amount of AMD, LAM, KLAC which were the top 3 performing stocks in 2019.

I agree Patrick, I would have guessed that there would have been companies with higher gains than AMD on the year. Interestingly no. Another angle to look at this is only two companies doubled in price or more (AMD LAM)

Vbiv. You could have bought it at 50 cents not long ago but it's still a double or triple at 1.50 for 2020.

Ah, but that's a gain within part of a year, not from one January 1st to the next.

Maybe that's the real question I should have asked:

What's the most profitable sequence of trades you could have made in 2019? That is, buying X on the 1st, swapping over to Y on the 2nd, etc. Or even hourly.

I bet perfect hits on all of those daily or hourly winners would have been up 20x or more by the end of the year.

Patrick, I think the follow up question is silly...

You can short, you can buy on margin, etc. The combinations to maximize profit on an hourly basis would be mind blowing over the 253 trading days.

I tend to think your original question was the right one.

Patrick says

I bet perfect hits on all of those daily or hourly winners would have been up 20x or more by the end of the year.

It would be much much higher than 20x. And nobody on the planet could have come close to it.

Roku and Apple did fantastic for me but the majority of my money is in mutual funds.

I want to go make some money and buy more stocks and funds.

Apple nearly doubled in 2019. It started the year some 30% off it's high three months yearier, which gave it a low base to start 2019.

What's the most profitable sequence of trades you could have made in 2019?

On many days, some stock will gain 20%. If you could just increase your wealth 20% for 250 trading days, a single dollar would grow to $6.24e19. That's easily enough to buy everything for sale on earth if your great wealth didn't cause market distortions.

Excellent point.

A friend of my was day or short-term trading back in 2007 and set up some conditions.

He invested about $50,000 for this. He did not buy on margin, short any stock or trade any options like a straddle.

He would look at mid cap to large cap stocks that got beaten down such as drop 10% in one day and then buy them the next day. He would hold on to them for sometimes no more than a few hours or a couple of days.

He sold if it went up 5% or if it went down 10% from my stock purchase price. If in 5 days the stock does not go up 5% then he would sell it.

From what I remembered he told me ended up growing the initial investment of $50,000 to around $120,000 in 6 months.

BayArea says

You can short, you can buy on margin, etc. The combinations to maximize profit on an hourly basis would be mind blowing over the 253 trading days.

From what I've seen the best hedge fund annual performance is usually about 35% a year, and Soros fund earned on average 20% annually since the 1970s.

I went to grad school with a friend who went to work for a small hedge fund that employed him as a "quant" to do engage in all types of trading to maximize annual returns.

His performance is on annual return hence he may be up 40% the first half and then he'll make conservative adjustments for second half in order to safely achieve the bonus requirement or quota (i.e., at least 25% annual return).

University of Michigan's Industrial Engineering department had a Financial Engineering specialty that was grooming "quants". They applied various methods like fourier analysis and stochastic methods.

Yes good point with the top hedge fund boundary.

Those guy dedicate their lives to maximizing returns. And the best ones will average 25-30% where $1M is a typical minimum buy-in.

AD says

University of Michigan's Industrial Engineering department

@AD Are you also a UM engineering grad? I did EECS there.

AD says

A friend of my was day or short-term trading back in 2007 and set up some conditions.

He invested about $50,000 for this. He did not buy on margin, short any stock or trade any options like a straddle.

He would look at mid cap to large cap stocks that got beaten down such as drop 10% in one day and then buy them the next day. He would hold on to them for sometimes no more than a few hours or a couple of days.

He sold if it went up 5% or if it went down 10% from my stock purchase price. If in 5 days the stock does not go up 5% then he would sell it.

From what I remembered he told me ended up growing the initial investment of $50,000 to around $120,000 in 6 months.

None of that stuff works anymore. A 10% drop is nothing in algo world. Algos can make stocks drop or rise 30% for no reason.

mell says

None of that stuff works anymore. A 10% drop is nothing in algo world. Algos can make stocks drop or rise 30% for no reason.

Yes, if you are referring to the proliferation of algorithms or computer or machine trades and its effects on volatility.

https://money.cnn.com/2018/02/06/investing/wall-street-computers-program-trading/index.html

AD says

mell says

None of that stuff works anymore. A 10% drop is nothing in algo world. Algos can make stocks drop or rise 30% for no reason.

Yes, if you are referring to the proliferation of algorithms or computer or machine trades and its effects on volatility.

https://money.cnn.com/2018/02/06/investing/wall-street-computers-program-trading/index.html

Tlry went to 300 in one day it's at 16 now. Stocks gain or lose 30% in a few days on no news just because algos feed off of headlines and each other. The downdrifts and updrifts are much more pronounced these days. Swing trading is harder cause finding the entry points is harder now.

TLRY

How could this stock with such a miserable profitability score ever go that high without algos feeding on the cannabis legalization news craze and a big SV fund buying in. This news cycle back then was enough to let the algos spiral out of control. Now you may say that it was a good short at 300 and it def was but so many shorts got destroyed on the way up, similar to tsla and many buyers left holding the bag at 300 for Tlry or 959 for tsla.

BayArea says

Yes good point with the top hedge fund boundary.

Those guy dedicate their lives to maximizing returns. And the best ones will average 25-30% where $1M is a typical minimum buy-in.

Extremely rare for an algo to achieve 25% returns. Some do in tiny niche corners of the market, especially where there are other barriers to entry. This little niches arent scalable.

The largest market making firms in Chicago have trouble scaling past $1 billion in capital, most much less.

Hi frequency companies, if there are any real ones left, will manage a tiny fraction of the capital that a large buy/hold hedge fund would control.

The hi frequency fund makes money w technology and niche barriers to entry. This isnt investing anymore, and nothing we could ever hope replicate

CBOEtrader says

The hi frequency fund makes money w technology and niche barriers to entry. This isnt investing anymore, and nothing we could ever hope replicate

CBOE, I just put half in a fund of funds like Vanguard Lifestrategy Conservative Growth Fund and the other half on long term holds (at least 5 years) on "every-day economy" large caps like Facebook, Disney, Dollar General, and Apple as well as a Vanguard healthcare mutual fund.

mell says

How could this stock with such a miserable profitability score ever go that high without algos feeding on the cannabis legalization news craze and a big SV fund buying in. This news cycle back then was enough to let the algos spiral out of control. Now you may say that it was a good short at 300 and it def was but so many shorts got destroyed on the way up, similar to tsla and many buyers left holding the bag at 300 for Tlry or 959 for tsla.

Its pure speculation like investing in penny stocks.

From what I read TLRY has laid off 10% of its workforce and has shaken up its management team. Perhaps it may make a turnaround.

Well...the best you can do is not getting burned when it goes back down, that CB liquidity injection ( right before election ) is outright crazy.
The stock market is becoming a joke by the day look at Tesla and Boeing Aerospace ridiculously overpriced. All those funds and HFT algo's are after your hard-earned money, you know when the average joe six pack who's financially illiterate brags about how much he made with Tesla stock or Crypto that the market reached "a top".

Southpark famous and its gone:
www.youtube.com/embed/TGwZVGKG30s

Conversely, you can also do very badly in a year with a select stock.

Try WFC=Wells Fargo.

I inherited some of this in 2017 and couldn’t decide what to do with it but thought procrastination would be okay since the famous investor Warren Buffett was a shareholder.

“How bad can it be if Buffet owns it?”
Actually, it was pretty bad, I wanted to sell my WFC and now am $25,000 underwater so I guess I will wait and see.