Invest in the best stocks

JulieClot

Hello,

I want to invest in stocks

Thrugelmir

Interesting concept. Not one I've encountered before. 
Perhaps the fact that much of Amazon's operation is still actively trading during this crisis. Is why investors haven't sold out of the stock to such a degree. Whereas with many of the world's airlines grounding their fleet. With no indication as to when if ever they'll be fully operational again. That investors consider Boeings future order book and pipeline to be under threat. As a consequence marking the share price down. 
A diversified and concentrated portfolio of 20-30 quality stocks. Is better than 5. As will enable coverage across a broad range of sectors. Not for the faint hearted though. As there's always the possibilty of a company crashing to earth. However financially strong it may appear. 

bostonerimus

Hmm, smacks of numerology to me...and why would you base a long term strategy on a short term event?

Alistair31

JulieClot said:

Hello,

I want to invest in stocks that offer the greatest return.

To do this, I calculate the potential profit from stocks in my portfolio. This calculation considers current stock prices (virus) and previous stock prices (pre-virus). To calculate the potential profit, I divide potential (post-virus) stock prices by current (virus). This gives a return ratio. I then multiply this ratio by the amount to invest. Example, pre-virus stock price of 1350 divided by current stock price 850 gives a return ratio of 1.58%. £1000 x 1.58 = £1580. So, this yields disappointing £580 return.

This calculation is useful because it shows stocks which generate the highest profits and stocks which do not. There are 5 stocks with a return ratio greater than 2 in my portfolio. This means, on average, these 5 stocks will yield a return of around 2.5%. Popular stocks like Amazon, Microsoft and Apple, while a safe bet, offer disappointing returns as low as 1.15% and 1.32%. In my opinion, buying these stocks is a poor decision.

Instead, if I were to invest £1000 in these 5 stocks with return ratio greater than 2, this should return >£2000 when the virus ends and stocks return to pre-virus prices. However, the assumption of my calculation is that stocks will rebound to the market price before the virus. Obviously, there is no certainty this will happen, but they may, in a space of 6-12 months, be on track. So, choosing 5 stocks with the highest return ratio makes a great investment portfolio that minimises losses if one company should fail, while maximising profit across all stocks.

So… What does this mean? It means that investing in popular stocks like Amazon and Apple is a safe option that does not yield the greatest return. It is actually a bad decision. The money invested in these stocks can be better invested in stocks with a return ratio greater than 2. This will ensure maximum profit when the virus is over but comes with increased risk of course. Fortunately, there are strong airline (Boeing / Airbus) and transport stocks that offer these greatest returns.

Of course, if we are in a recession then we may all be screwed anyway!

Feel free to criticise my analysis.

*** I am new to investing but thought you guys might benefit from my analysis ***

Thanks 😊

Too much sun ? 

JulieClot

bostonerimus said:

Hmm, smacks of numerology to me...and why would you base a long term strategy on a short term event?

This is a short term strategy. It's not for the long term. 

JulieClot

Thrugelmir said:

Interesting concept. Not one I've encountered before. 
Perhaps the fact that much of Amazon's operation is still actively trading during this crisis. Is why investors haven't sold out of the stock to such a degree. Whereas with many of the world's airlines grounding their fleet. With no indication as to when if ever they'll be fully operational again. That investors consider Boeings future order book and pipeline to be under threat. As a consequence marking the share price down. 
A diversified and concentrated portfolio of 20-30 quality stocks. Is better than 5. As will enable coverage across a broad range of sectors. Not for the faint hearted though. As there's always the possibilty of a company crashing to earth. However financially strong it may appear. 

Trump has repeatedly said he'd 'take care of Boeing'. This company is so old and valued that I don't think America would let it go if it got into trouble. Of course, money trumps everything (no pun intended lol) and I could be wrong.

Username999

Boeing was in trouble before Coronavirus.

JulieClot

Username999 said:

Boeing was in trouble before Coronavirus.

its stock was still holding around 343 months after grounding of its 737-max planes.
now it's 146.
343/146 * 1000 = around £2349, giving £1349 profit.

Thrugelmir

JulieClot said:

Thrugelmir said:

Interesting concept. Not one I've encountered before. 
Perhaps the fact that much of Amazon's operation is still actively trading during this crisis. Is why investors haven't sold out of the stock to such a degree. Whereas with many of the world's airlines grounding their fleet. With no indication as to when if ever they'll be fully operational again. That investors consider Boeings future order book and pipeline to be under threat. As a consequence marking the share price down. 
A diversified and concentrated portfolio of 20-30 quality stocks. Is better than 5. As will enable coverage across a broad range of sectors. Not for the faint hearted though. As there's always the possibilty of a company crashing to earth. However financially strong it may appear. 

Trump has repeatedly said he'd 'take care of Boeing'. This company is so old and valued that I don't think America would let it go if it got into trouble. Of course, money trumps everything (no pun intended lol) and I could be wrong.

Doesn't make it a good investment though. Yes it supplies the US with aircraft. Boeings current order book is over 5,000 aircraft currently. How many of these orders are going to cancelled due to the current crisis? 
The UK Government will (part) nationalise British Airways if neccessary.  Aircraft are important parts of modern life. 

JulieClot

Thrugelmir said:

JulieClot said:

Thrugelmir said:

Interesting concept. Not one I've encountered before. 
Perhaps the fact that much of Amazon's operation is still actively trading during this crisis. Is why investors haven't sold out of the stock to such a degree. Whereas with many of the world's airlines grounding their fleet. With no indication as to when if ever they'll be fully operational again. That investors consider Boeings future order book and pipeline to be under threat. As a consequence marking the share price down. 
A diversified and concentrated portfolio of 20-30 quality stocks. Is better than 5. As will enable coverage across a broad range of sectors. Not for the faint hearted though. As there's always the possibilty of a company crashing to earth. However financially strong it may appear. 

Trump has repeatedly said he'd 'take care of Boeing'. This company is so old and valued that I don't think America would let it go if it got into trouble. Of course, money trumps everything (no pun intended lol) and I could be wrong.

Doesn't make it a good investment though. Yes it supplies the US with aircraft. Boeings current order book is over 5,000 aircraft currently. How many of these orders are going to cancelled due to the current crisis? 
The UK Government will (part) nationalise British Airways if neccessary.  Aircraft are important parts of modern life. 

Yes airlines are vital, which makes them the best stocks to invest in now. The US government seems to look after its airlines more than the UK (they got a big bail out in the US), so i'd maybe give easy jet a miss.
4 I'd go for are:
Delta
United Continental
Boeing 
Southwest 

Thrugelmir

JulieClot said:

Thrugelmir said:

JulieClot said:

Thrugelmir said:

Interesting concept. Not one I've encountered before. 
Perhaps the fact that much of Amazon's operation is still actively trading during this crisis. Is why investors haven't sold out of the stock to such a degree. Whereas with many of the world's airlines grounding their fleet. With no indication as to when if ever they'll be fully operational again. That investors consider Boeings future order book and pipeline to be under threat. As a consequence marking the share price down. 
A diversified and concentrated portfolio of 20-30 quality stocks. Is better than 5. As will enable coverage across a broad range of sectors. Not for the faint hearted though. As there's always the possibilty of a company crashing to earth. However financially strong it may appear. 

Trump has repeatedly said he'd 'take care of Boeing'. This company is so old and valued that I don't think America would let it go if it got into trouble. Of course, money trumps everything (no pun intended lol) and I could be wrong.

Doesn't make it a good investment though. Yes it supplies the US with aircraft. Boeings current order book is over 5,000 aircraft currently. How many of these orders are going to cancelled due to the current crisis? 
The UK Government will (part) nationalise British Airways if neccessary.  Aircraft are important parts of modern life. 

Yes airlines are vital, which makes them the best stocks to invest in now. The US government seems to look after its airlines more than the UK (they got a big bail out in the US), so i'd maybe give easy jet a miss.
4 I'd go for are:
Delta
United Continental
Boeing 
Southwest 

Some are going to go bust or at least downsize. Too much capacity in the short term.