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WiNR Ratio Algorithm Analysis of Our Positions (while The Great Trade War gets real)

December 5, 2018 by Cody Willard Leave a Comment

It’s finally dawning on traders and investors that The Great Trade War of the 21st Century (I should have copyrighted that the first time I used it a year ago) is actually real and the Fog of War casualties that I’ve been warning about are starting to arrive.

I’ve been preaching cautiousness all year and have reduced the number of long positions and have trimmed my longs repeatedly in the last two years to raise cash.

I ran each of our positions through my WiNR Ratio program. The only three that come up with relatively strong annualized potential upside returns adjusted for risk/reward and Revolution Factors and other proprietary inputs are Apple, Snap and Palo Alto. Each of the rest of our stocks come out with quite attractive WiNR Ratios. But none of them come out as the screaming buys that they were when I was actually buying them in years past — before they went up 30%, 100%, 500%, 1000%. I actually backtested those trades and ran our initial buys of our positions through the WiNR Ratio program and the risk/reward adjusted upside on almost all of them was through the roof. Makes sense (and helps to validate the algorithmic program itself).

I’ve also run dozens of other stocks through the system including Goldman Sachs GS, Shopify SHOP, GE, IBM, Xylnx XLNX, Qualcomm QCOM and so on. I’ve found two that look quite attractive but again, are not quite at “screaming buy” status so I’m not moving on them quite yet.

Given my overall cautiousness about the markets and the economic cycle — and the fact I’m about to launch a hedge fund, of course — I’m not in a rush to add them just yet.

Over the years, we continually learn the importance of not forcing trades and not trying to catch the exact bottoms and tops (though we actually have a few times!). After the 1000+ point drop in the DJIA since Monday morning’s silly euphoric “Trump and Xi said the Trade War is over” pop the markets are likely to be down again Thursday. I’m surprised that this headline didn’t cause the futures to drop more frankly: “CFO of Huawei Arrested in Canada At U.S. Request – Canadian authorities arrested Huawei Technologies’ chief financial officer at the request of the U.S. government for alleged violations of Iranian sanctions, the latest move by Washington to crack down on the Chinese cellular-technology giant.”

Uh, did I mention The Great Trade War of the 21st Century?

Don’t be alarmed. Don’t panic. We are quite prepared for this and there are pitches both long and short developing here that we will be ready to take advantage of.

I’m going to kiss the wife and kids goodnight.

 

 

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Filed Under: Trading

Disclosure: At the time of publication, the firm in which Willard is a partner and/or Mr. Willard had positions in some of the stocks mentioned above although positions can change at any time and without notice.

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This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or cryptocurrency or token any other product or service by Cody Willard or any other third party. Furthermore, nothing in this is intended to provide tax, legal, or investment advice and nothing in this should be construed as a recommendation to buy, sell, or hold any investment or security or cryptocurrency or token or to engage in any investment strategy or transaction. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your business advisor, attorney, or tax and accounting advisor regarding your specific business, legal or tax situation.

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