JuniorDepot20 – Second Intermediate Goal is [Almost] Reached

Elle, a nine years old girl, who manages her wealth with our help, has hit (ahead of time) her target for the 2nd year: to earn at least 220 EUR.
In future she has to alter her investing strategy a little bit since on the one hand her broker DeGiro introduces flat-fee trading with American stocks but on the other hand will compensate the negative rates only upto 2500 EUR cash.
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JuniorDepot19 – Excellent Performance Despite The Market Dip

Elle, a eight nine years old girl has reached an excellent investment result in August 2019 despite the market dip. Discipline, diversification and of course some luck were ingredients of her success. Continue reading "JuniorDepot19 – Excellent Performance Despite The Market Dip"

JuniorDepot18 – Hedging Profit by a Long-Short Lock-in

During a high-turbulence market regime it often makes sense to fix the profit quickly. However, Elle's broker DeGiro provides fee-free trades with the following ETFs only once per months. Elle's trading capital is relatively small so far (€2165), thus paying €2 trading fee shall be avoided whenever possible. So I taught her to lock the profit in long position by means of the respective inverse ETF! Continue reading "JuniorDepot18 – Hedging Profit by a Long-Short Lock-in"

JuniorDepot17 – Fixing Profit for a while

Elle continues growing her wealth, reaching the CAGR of 11.50%. Now she is to learn that keeping a good pace in the long run implies making pauses. Due to political risks and economic concerns in Europe we have, so far, closed all positions in Elle's portfolio.
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Reading A First Course in Quantitative Finance by Thomas Mazzoni

A First Course in Quantitative Finance by Thomas Mazzoni was published a year ago. It provides a thorough analysis of such topics as Local Volatility, derivative pricing via PDEs (and solution of theses PDEs) as well as a good insight of Levy processes. Although it might be too big and too general for the 1st course, it is definitely worth reading as the 1.5* course in quantitative finance. Continue reading "Reading A First Course in Quantitative Finance by Thomas Mazzoni"

JuniorDepot16 – Markets Fall but Not Elle’s Wealth

The markets continue falling as the trade war between China and US escalates. But it did not affect Elle's portfolio. Moreover, she has even made some money with an inverse ETF!
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MATtel Stock – Barbie Reaches Puberty and Draws a DoubleF*uck Chart Pattern

Mattel, a company that owns Barbie brand, currently experiences bad times and suffers losses. However, this may be irrelevant for tactical traders, esp. those who rely exclusively on technical analysis. But now they shall be strongly disappointed too: MAT stock has drawn a pattern, which can be named doubleF*ck.

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Reproducing a Pseudo-Random Walk down the Wall Street

Malkiel affirms that the stock returns follow the random walk. Lo and MacKinlay retort they do not.
In this post I show how a mean-reverting process can be efficiently disguised as a random walk. Most likely, the market does follow a similar disguise-pattern (at least sometimes).
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JuniorDepot15 – Reaching 13.75% CAGR with stockpicking

Elle got started with her savings plan in Jan 2018 with a monthly installment of €100. Now she has sufficient trading capital, so that (taking broker fees into account) the stock picking may make sense. She tried to make her hands dirty with stock selection and earned €139,53 gain or 8.6% return in less than a month! The CAGR of her savings plan is currently 13.75% Continue reading "JuniorDepot15 – Reaching 13.75% CAGR with stockpicking"

JuniorDepot14 – Getting Profitable Again and Training Patience

Elle's portfolio has recovered with the recent rise of the markets. We fortunately closed all positions near their recent maxima, Elle again makes profit.
Currently, we watch the market carefully but don't hurry up to open the new positions. If you wait by the river long enough, the bodies of your enemies will float by (Sun Tzu).
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