Trade Idea: Buying Strength in a Weak Sector
This is one of the top performing stocks in a sector that has had a tough go year to date. I think it's a name to consider.
One of the incredibly frustrating things about my Trade Idea performance seven months into 2022 is that I’m actually outperforming the broad market if you change the goalposts. I know, if only we were simply allowed to make up the rules as we go in real life! What even are the goalposts? If we compare my trades to a cash position, I’m doing poorly - now down 1.4% on an equal weighted portfolio of my trades.
However, the S&P 500 is actually down 13% year to date. So if we’re comparing my trades to fully invested portfolios, it’s fair to say I’m outperforming this year. Of course, we don’t judge my trades against cash or against the S&P 500 year to date. We compare my trades against the S&P from time of buy to time of sell. Meaning, if I buy Apple stock on a Tuesday and sell it Friday, we judge the trade’s performance against the S&P from Tuesday to Friday. If the gain in Apple was better than the broad market, I won. If it was even or worse, there was no point in picking the individual equity.
With that in mind, would it surprise you to know if you bought the broad S&P instead of my Trade Idea picks this year, you’d actually be up over 4% in 2022? It’s true. So here’s another Trade Idea. Buy the S&P… Kidding…
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