From $70k loss to $160k profits: My 2024 Stock Market Journey
In my previous post, I showed my 2024 P/L – seemed all roses right? Wrong, it’s actually been a mega roller coaster. I’ve been actively investing for over 3 years, starting with a small capital with the occasional DCA. Since I started when the markets were going down in 2022, I am usually more pessimistic in nature. But this year truly took the cake in testing my conviction, both in myself and the companies I bought shares in.
Starting the Year with an egg to the face.
Earlier this year, I held over 300 Tesla shares and multiple long-dated, out-of-the-money puts. I believed in Tesla as a company and thought that its performance would improve with declining interest rates. But the market had other plans.
In January, Tesla’s price hovered around $250. Confident in Tesla’s growth potential, I held strong even as the stock started to decline. I was $50k in the red in January alone and by 22 April, Tesla hit rock bottom at ~$140 and I was down approximately $70k.
On the way down, I added shares along the way to average down, but also sold some shares to stay afloat and manage margin exposure.
This period wasn’t easy. It reminded me of 2022-2023 when I saw Tesla plunge from $300 to $100. My belief in Tesla never changed, but this time, my perspective on risk management evolved.
In January, Tesla’s price hovered around $250. Confident in Tesla’s growth potential, I held strong even as the stock started to decline. I was $50k in the red in January alone and by 22 April, Tesla hit rock bottom at ~$140 and I was down approximately $70k.
On the way down, I added shares along the way to average down, but also sold some shares to stay afloat and manage margin exposure.
This period wasn’t easy. It reminded me of 2022-2023 when I saw Tesla plunge from $300 to $100. My belief in Tesla never changed, but this time, my perspective on risk management evolved.
My biggest lessons learnt on Risk Management of my portfolio
1) The market can stay irrational longer than you can stay solvent.
Truer words have never been said. My use of margin is powerful, but it’s a double-edged sword. During Tesla’s drop, I realized I had stretched my limits, and it was a period of worry and stress. I still do use margin, but I am much more careful about the proportion of margin I use relative to my portfolio size. (My personal preference is less than 10% of my portfolio size, and it must be something that you CAN AFFORD TO PAY BACK even if your portfolio goes to zero)
1) The market can stay irrational longer than you can stay solvent.
Truer words have never been said. My use of margin is powerful, but it’s a double-edged sword. During Tesla’s drop, I realized I had stretched my limits, and it was a period of worry and stress. I still do use margin, but I am much more careful about the proportion of margin I use relative to my portfolio size. (My personal preference is less than 10% of my portfolio size, and it must be something that you CAN AFFORD TO PAY BACK even if your portfolio goes to zero)
2) Invest in companies you believe in and have a thesis about.
Whether it’s their product, growth potential, or valuation, you need conviction that is grounded in facts. There are many good resources that provide information and analysis, on both Youtube and X. As someone with a full time job and not a lot of free time to aggregate all the financial statements and news of the company, my favourite resources for research are on X/Substack, and 2 of my favourite analysts are:
• Chris (@DataDinvesting)
• Brad Freeman (@Stockmarketnerd)
Whether it’s their product, growth potential, or valuation, you need conviction that is grounded in facts. There are many good resources that provide information and analysis, on both Youtube and X. As someone with a full time job and not a lot of free time to aggregate all the financial statements and news of the company, my favourite resources for research are on X/Substack, and 2 of my favourite analysts are:
• Chris (@DataDinvesting)
• Brad Freeman (@Stockmarketnerd)
3) Diversification matters… to a point.
As Charlie Munger once said: “Diversification is for those who don’t know anything.”
But even Berkshire Hathaway holds stakes in multiple companies. A balanced portfolio with good companies can protect you from unexpected events (like Tesla’s drop for me).
As Charlie Munger once said: “Diversification is for those who don’t know anything.”
But even Berkshire Hathaway holds stakes in multiple companies. A balanced portfolio with good companies can protect you from unexpected events (like Tesla’s drop for me).
Turning the Tide
With this change of perspective, I bought into/ increased my stake into the following companies, with a view on company fundamentals and Macro factors
• Increased: PLTR, SOFI, and HOOD
• Buy In: COIN, HIMS, AMZN, GOOG and NVDA
• Sell: When TSLA rose back above my cost basis, I trimmed some shares despite continuing to maintaining a positive outlook on the company.
I continued to purchase shares/sell put options on these companies, and by August I was profitable again – a flash crash at the start of August set my portfolio back, but I took the opportunity to add some of these companies at a lower price, with better use of my cash reserves and management of margin. And then November happened, and my portfolio grew substantially.
With this change of perspective, I bought into/ increased my stake into the following companies, with a view on company fundamentals and Macro factors
• Increased: PLTR, SOFI, and HOOD
• Buy In: COIN, HIMS, AMZN, GOOG and NVDA
• Sell: When TSLA rose back above my cost basis, I trimmed some shares despite continuing to maintaining a positive outlook on the company.
I continued to purchase shares/sell put options on these companies, and by August I was profitable again – a flash crash at the start of August set my portfolio back, but I took the opportunity to add some of these companies at a lower price, with better use of my cash reserves and management of margin. And then November happened, and my portfolio grew substantially.
Final words
My original intent of writing on this platform was to caution that this should not be the time to FOMO into the market – despite many people flashing their bright green portfolio now, the journey is not supposed to be easy and dandy. My advice is to stay disciplined and DCA into good companies that you have a conviction in. This way you can mitigate the risks and be more psychologically ready to deal with any fluctuations in the prices of the shares you own.
Thanks for reading! Feel free to AMA and I’ll be happy to share more if I can.
My original intent of writing on this platform was to caution that this should not be the time to FOMO into the market – despite many people flashing their bright green portfolio now, the journey is not supposed to be easy and dandy. My advice is to stay disciplined and DCA into good companies that you have a conviction in. This way you can mitigate the risks and be more psychologically ready to deal with any fluctuations in the prices of the shares you own.
Thanks for reading! Feel free to AMA and I’ll be happy to share more if I can.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Just a normal working class sharing my layman take on the stock market.
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StockAmateur : I was once, regretted my decision of selling the stock because of panic, and then, on the next week it went even higher. I learned my lesson. NEVER SELL your investment when it goes minus. I have done a lot of research on this particular stock, I know it will grow, but yet my mind keep sabotaging me..
黑客淘金者 : Is it profitable?
72423057 : I would like to ask for your opinion, can I heavily invest 50% in NVDA at a very low price?
Moonsoir Francois OP StockAmateur : Yes, in the scenario you described, every dip is an opportunity. But we must also accept that there is a non-zero chance that we could be wrong, hence my opinion on having some diversification to maximise the probability of profitability when you have done your due diligence.
Moonsoir Francois OP 黑客淘金者 : Yes, but there was a very dark period during that time.
Moonsoir Francois OP 72423057 : I personally think that this price range is reasonable in the long run. However, short-term fluctuations are difficult to predict. I personally practice Dollar Cost Averaging (DCA).
Stockingninjacat : What the …..
72265025 : I also sold Tesla on and of on call options made nice returns, but this last run up I sold it at profit of 3,600.00 and it kept going up and know I can see I sold too early. On the bright side I bought Coinbase and Nvidia and kept adding as both stocks keep going down .
liquidityHunter : 50% returns in a month is amazing !
101644863 : my motto patience Discipline Consistency....easier said than done
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