We have designed our traffic light to take out our human emotion in our stocktrading. Personally I think it was not the perfect time to buy but it came close and we had to buy some more stock because our traffic light had changed upward. You can find the full analysis here: “OCADO”
Please let me explain one more time 🙂 When the traffic light goes up we have to have more stock (most of the time that means buy unless our total stockvalue goes up enough) and when it goes down we have to hold more cash (what usually means sell some stock unless our total stockvalue goes down enough). In this case our stockvalue went down a little bit but the traffic light went up. So we had to buy more stock.
Our ETF only trades in the stock from our list of wiseguys. So that is our watchlist. Every day we highlight one of these stocks and give off and advice or rating on what we think you could do with the shares at that moment. When a stock rises for at least 30% for at least a straight 5 years they make it to the list. But when the fall the get kicked out. Not many stock do make it but still the list changes on a regular basis. We are long term investors so most stock are in there for a long time. To see the exact figures, outcome and effect you can click on the links below.
Traffic light: Our Cash / Stock Ratio: the-wiseguy.com / The Traffic Light
The ETF: Our Latest Fund Changes: the-wiseguy.com / TWISE ETF
The List: Our List Of Wiseguys: the-wiseguy.com / The List
Update October 12th:
Up, Up and UP. This week our “Traffic light“ turned GREEN again, finally. Even though we have election anxiety and corona virus worries. The stock markets do not seem to care or, as we think, they are looking forward to a quick recovery. Because most stock indices and exchanges are in the green and keep going up, up and up. There are some negative days but on average we have gained 3 points in our “Traffic light“ system this week. The “Traffic light“ is now at 83, meaning 83% Stock and 17% Cash to hold. Because of that we had to add about 2% more shares to our portfolio positions (See the My Holdings section on the ETF page for more details).
And now the best news: For the first time all our positions are profitable. We do not have any red numbers in our portfolio. Since we started this ETF in mid June the profit on our stock is 31,33%. On our total value it is about 20% because we had to protect some wealth when the markets went down (see the strategy – step 4). To be exact: “The Return On Investment is 19,91%” in 4 months.Let’s see what the rest of the year brings us.
Update October 4th 2020:
– Mark our time… There will be buying oportunities ahead but not now. The “Traffic light“ remained at 80% Stock and 20% Cash. We believe that patience is an investors strongest weapon so we will mark time. The next few weeks will be exciting we have the US elections coming up and there are more Covid-19 worries. After that there might be a relief rally. We expect the stockmarkets to react fairly heavy with strong ups and downs but the general direction will be downwards. So we just have to wait it out and strike at the right time. We will need money for that so that is why we wait.
Update September 27nd: –
Lets start with some bad news. We had to sell Repro Med Systems Inc (Ticker: KRMD) with a 29% loss. Our believe is that the stock we pick all rise with a minimum of 30% a year for at least 5 years and they have to keep rising with that same speed. But when a stock losses 25% from the high we believe something is wrong. Most of the times we do not know the reason but something is up. Why should a stock fall 25% all of a sudden? Is there fraude? Has something changed in the indusrty? Do they not have the growth we expected? Or is it the whole sector? Anyway something is wrong and to protect ourself from future losses we have to sell when a stock is down more than 25%. That is the rule. Sometimes they rebound but most of the times we were right in the end.
And now the good news: The stockmarkets do not represent the value of the companies today but they are an expectation of what the value will be on a later date (6 to 12 months usually). That is especially clear this week. Altough everybody is afraid of a second wave of CoVid19 victims the markets do not react to that news at all. Instead they are slowly going higher.
Most indices are unchanged or a little up from last week. Interest rates and the VIX is going down. That means our “Traffic light“ goes up and with 3 points this week. We are almost in the green zone, only one point left to go. It is at 80% Stock and 20% Cash. So we bought some more stock. We have increased our positions with about 7%. That does not 1 in 1 correspond with 3 points but we also have to make up for the cash we got from selling KRMD.