Back in Black

Nice. Got back from vacation on Monday and the markets have picked up just in time. My main thesis, that volatility will increase significantly for technology, has gotten some support from the markets. For my personal accounts, I have been using System HAG to determine entry points for the technology stocks I most want to own. I have been buying out-of-the-money options, and this strategy paid off quite well today. I'll start sharing snapshots of these accounts in the near future.

For now, we have some accounting to do. First of all, the System HAG bought Nuance last Tuesday and sold it last Wednesday for a gain of 1.78%. Additionally, the program bought Ameritrade yesterday and sold it today for a whopping gain of 9.39%.

Now, all together, System HAG has made 26 trades, each with an average gain of .887% over a 1 to 2 day holding period. Furthemore, if 1/4 of a fixed portfolio was invested in each trade, our portfolio would now be up 5.76% since the beginning of trading in February.

Short one

Today I'm buying Nuance. Tomorrow I'm going on vacation.

In Full Force

The Bigger Boom is happy to see that networking and fiber stocks have continued to rise. Perhaps the market is anticipating something? Soon, data will be flowing all around us. Within 10 years the amount of bandwidth each of us consumes will have increased a hundred-fold.

Following up on Mondays' post, the three stocks held going into Tuesday were all sold at the close on Tuesday. Broadcom was bought last Friday, and it's gain was 2.47%. Ameritrade and Seagate werer both bought on Monday, and their gains were 1.4% and 3.26%, respectively.

So now, since the programs inception, there have been 24 trades and the average gain has been .495% per trade. Overall, the portfolio (assuming each investment is 1/4 of the portfolio) would have returned 2.97%.

A fair amount of losses

OK, so it's time to go over the trades from the last few days.

First off, of the stocks purchased Wednesday, all were held until Friday and then sold. The returns were as follows: Arris -.49%; E*Trade 0%; Western Digital -4.76%; Sandisk -1.65%

Of the stocks bought on Thursday, two were sold on Friday and the other two were held until Monday and sold. The returns of these stocks were: Novell 3.13%; Ameritrade 1.75%; Marvell -2.8%; Seagate -2.3%.

Additionally, two stocks were bought on Friday: Broadcom and Western Digital.

On Monday, Western Digital was sold for 1.22% gain and Broadcom was held. Seagate and Ameritrade were bought on Monday.

All told, there have been 9 additional round trip trades, and each trade's average return was -.655%

So now, since the beginning of trading, the program has made an average return of .23% per trade, and there have been 21 trades. The total return, assuming each buy was for 1/4 of the portfolio, is 1.22%.

Double up

So all four stocks that were bought yesterday ended up significantly in the red after being significantly in the black earlier in the day. We will hold them until tomorrow, and buy 4 more stocks, again putting 1/4 of the portfolio into each one: Ameritrade, Novell, Marvell, and Seagate.

Finally

The market has been shaky for the past few days, but it wasn't until today that System HAG wanted to begin buying. 1/4 of the portfolio will go into the following 4 stocks: Sandisk, Etrade, Western Digital, and Arris Group.

Last week, networking equipment makers, especially ones that specialize in fiber cable and digital wireless, made significant market gains. These companies are the ones that have positioned themselves to build out the next-gerneration, higher-bandwidth internet. Cisco Systems, JDS Uniphase, Qualcomm, Corning, etc.

This blog was named "The Bigger Boom" because one of its goals is to track the progress of the next phase of the communication revolution. I see the internet now, compared to the internet we will know 10 years from now, akin to the comparison between radio and television. The transformation is just beginning now, and the result will be an economic boom (as well as an equity market boom) that's even bigger than the one experienced in the late 90's. Hopefully, it will proceed much more orderly.