30 Second Update:
Sunday, 4/21/2024: The S&P 500 is below its 50 day simple moving average. We have sold all of our positions. We are now sitting on the sideline waiting for the next upward trend.
Magnificent Seven Positives:
The products of these seven companies are used globally on a daily basis.These seven stocks are in an upward trend. We believe in the tried and true philosophy, "Don't fight the trend."These companies have a continuous history of substantial profits.These companies project strong growth potential.At the time of this writing, this group has more cash on hand than debt. This is rare in today's stock market.
Negatives:
Their current price levels are high. Recently, they have increased in value considerably. Historically, when a stock increases rapidily, the corresponding fall can even be faster.
The Ten Ticker Symbols:
AAPL - AppleMSFT - MicrosoftNVDA - NvidiaAMZN - AmazonTSLA - Tesla
For simplicity, it is often easier to purchase an Exchange Traded Fund (ETF) or an Exchange Traded Note (ETN) instead of individual stocks. Below are two such funds worth considering:MGK - Vanguard Mega Cap Growth Index Fund. This fund's investors receive the growth (or loss) of the return of the Magnificent 7 stocks combined with a few companies selected by Vanguard. This fund can be used as alternative for purchasing the stocks individually. The downside to this is Vanguard is selecting which stocks are heavily weighted instead of your controlling the selection.FNGU - MicroSectors FANG+ Index 3X Leveraged ETN. This fund's investors receive three times the growth (or loss) of the return of the Magnificent 7 stocks combined with a few companies selected by MicroSectors. Consequently, the upside is increased three fold; however, with the potential of tremendous gains, comes substantial risk. If the Magnificent 7 stock prices plummet, the losses can be tremendous! This ETN is extremely risky! Warning, if the Magnificent 7 stocks were each to fall by 34% or more in one market day, you would lose 100% of your investment, but this is almost certainly impossible because of the "circuit breakers" currently installed in the U.S. stock market.We all know stocks tend to be very volatile. The faster a stock rises, the faster it tends to go down. Therefore, at some point in time, the Magnificent 7 stocks will be in a downward trend. The following ETN may be very useful when the stocks are headed down.
FNGD - MicroSectors FANG+ Index -3X Inverse Leveraged ETN. This fund's investors receive negative three times the growth (or loss) of the return of the Magnificent 7 stocks combined with a few companies selected by MicroSectors. Consequently, the upside is increased three fold; however, with the potential of tremendous gains, comes substantial risk. If the Magnificent 7 stock prices increase, the losses can be tremendous! This ETN is extremely risky! Warning, if the Magnificent 7 stocks were to go up by 34%, you would lose 100% of your investment!
Lori Calvasina, RBC Capital Markets head of US equity strategy, says she expects energy and financial stocks to provide some earnings competition to the so-called "Magnificent Seven" of the S&P 500 index. "The threat to tech going into next year is not that their earnings necessarily fall apart, but rather that there's some competition," she says on "Bloomberg Markets."
Corient Partner and Wealth Advisor Amy Kong, and Joe Terranova, chief market strategist at Virtus Investment Partners, join 'Closing Bell' to discuss the CPI inflation data, what it means for more rate hikes, and more.
Satori Fund's Dan Nile gives some very interesting information on the Magnificent Seven Stocks.
'Magnificent Seven' stocks are expensive: Miller Value Partners' Bill Miller
Skip to 4:15 on the video for specific information on the Magnificent Seven Stocks. Skyrocketing bond yields are bad news for the bulk of the market, says Jim Cramer.
The "magnificent seven" have powered the stock market's gains this year. Brandywine Global Portfolio Manager John McClain tells Yahoo Finance Live anchor Rachelle Akuffo those stocks have been driven by AI and China relations. "If either one of those things start to cool a bit, you will see a meaningful pullback," McClain says.
Our Current Investment Status:
Sunday, 4/21/2024: The S&P 500 is below its 50 day simple moving average. We have sold all of our positions. We are now sitting on the sideline waiting for the next upward trend.Recent transaction history:On 11/3/2023, soon after the S&P 500 went above its 50 day SMA, we began purchasing shares of META at an average price of $311.98. On 4/18/2024, soon after the S&P 500 fell below its 50 day SMA, we sold all of our shares at an average price of $510.26. We are very happy with our 63% return in less than six months.
Why did we purchase META?
- It has a fantastic upward trend. You may click here to view the Stockcharts graph.
- As of Sep 30, 2023, META had $37.22 billion available and gave authorization for stock share repurchases. Full story here.
- Meta currently trades at a next-12 months (NTM) price-to-earnings multiple of 19x. Full story here.
Why did we sell META?
- We are unhappy with the overall trend of the stock market. The S&P 500 is below its 50 day SMA.
On 11/3/2023, soon after the S&P 500 went above its 50 day SMA, we began purchasing shares of FNGU at an average price of $162.77. On 4/18/2024, soon after the S&P 500 fell below its 50 day SMA, we sold all of our shares at an average price of $298.19. We are extremely happy with our 83% return. This is a fantastic return for a less than six month investment. This is why we operate this website.Why did we purchase FNGU?
- It has a fantastic upward trend.
- The reasons listed on this website.
Why did we sell FNGU?
- We are unhappy with the overall trend of the stock market. The S&P 500 is below its 50 day SMA.
On 3/18/2024, we purchased shares of GOOG at an average price of 148.27. On 4/18/2024, soon after the S&P 500 fell below its 50 day SMA, we sold all of our shares at an average price of $157.32. We are happy with our 6% one month return.Why did we purchase GOOG?Why did we sell GOOG?
- Nearly 5% of their market cap in extra cash. More than double of META's 2.4%.
- Trailing P/E is around 25. Lower than the average of the S&P 500 and even META.
- Forward P/E expected to be around 21. Lower than META's expected P/E of 25.
- Very few short positions. Not many people are willing to bet against GOOG.
- We are unhappy with the overall trend of the stock market. The S&P 500 is below its 50 day SMA.
What's next?
- We will sit on the sideline waiting for the next upward trend.
- When the S&P increases above its 50 day SMA, we plan to be fully invested. We do our best to only be invested when the S&P 500 is above its 50 day SMA.
When do we sell?
Obviously, our goal is to sell at the peak. But in reality, we all know that is extremely tough, if not impossible to do consistently. We know we want to be totally out of these positions when the S&P falls below its 50 day SMA, but if we wait that long, we will have given back much of our profits. Therefore, when we are "considerably up", we begin moving stock market money (a large percentage of our recent gains) to other assets. In other words, we like to purchase investment real estate or other appreciating assets. We call this "Portfolio Balancing".
Warning: Investing in the stock market is dangerous. You can and will lose money. We are not giving advice. We are simply documenting our strategy. Please consult a professional before making any investment decisions. You may click here for a full disclosure document. Thank you.
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