Trade Analysis

FIN 340

12/4/2011

Trading Analysis “THEOTHERGUYS”

As the portfolio managers of “THEOTHERGUYS” portfolio all trades initiated followed the investment strategy that was previously devised. There were 103 trades completed in 40 different securities over an 8 week period. This analysis is broken up into six different types of transactions; foundation five, blue chip/bellwether, technology/transportation, small cap technology/transportation, small cap, and momentum based EFT trades.

The first five transactions consisted of blue chip/bellwether stocks within the S&P 500 companies. It was determined by the team that the best way to stay even or outperform the S&P 500 would be to invest in the better performers within the index itself. These foundation five stocks would make up the 40% of the portfolio, as specified by the trading strategy, and were to be held for the majority of the 8 weeks. The first stock purchased in the portfolio was Google Inc. (GOOG). Google fit both the blue chip/bellwether and technology sector focuses of the trading strategy. Google was purchased because it is the blue chip of all blue chip stocks, a consistent stock that the team could depend on not to lose a large amount of money over the 8 week period, however it was a stock with great upside. 183 shares of Google were purchased initially at $545.04; an additional 175 shares were purchased at $605.78. The second purchase was a reallocation of funds from Apple Inc. (AAPL) to Google anticipating the upward movement of Google to continue based on Apple losing ground. Google had a $13,680.18 profit over the 8 week period. The next of the foundational five trades that was made was to purchase Apple Inc. (AAPL), another blue chip/bellwether stock in the technology sector. 239 shares of Apple were purchased at $418.27 and another 300 shares were purchased at$ 425.50 because of news about the new iPhone to be released before the end of the trading period. All shares were finally...