Investment and Trading Portfolio Allocation

 38% of my overall net worth is in stocks/401K/IRA: 

Following are my percentage allocation and theory behind each portfolio’s. Total of all the combined will be 100%. 

1.         401K is 23.73% (This is investment, I do not change the settings - may be once a 2 year or so) :

I have 70-30 Portfolio in 401K. 70% in stocks, 30% in Bonds. 

2.        IRA is 2.96% (I use this as trading. I keep 20-25 companies stocks in it. Most of them pay high dividend. Most of them are large cap companies. Some of the examples are: IBM, Verizon, Prudential Financial, Intel, Amgen, Starbucks, LMT, NEM, BHP etc. I have list of 30-40 solid companies - which gives more than 3% dividend, and I chop and change based on when they are at their appropriate level to buy and sell) 

3.        My Main Portfolio/Largest Portfolio is worth 43.51% 

I intend to “Not Sell” anything in this portfolio for at least next 10 years. I am in accumulation phase, and I will keep buying stocks on daily basis until accumulation phase finishes (March 2031). I have list of top 20 stocks that I buy $5 Daily, another list of 30 stocks to buy #3 Daily, another list of 40 stocks to buy $2 Daily, another list of 50 stocks which I buy $1 Daily. All the set up is done. I spend maximum of 30 minutes each weekend - to see if any changes are required. Criteria that I use is 20% down from my buying price. Once the stock is down 20%, I move that stock down (for eg: From $5 to $3 Daily) and move another one which is performing nicely move it up from $3 to $5 Daily bucket and so on. 10 Largest Position in this portfolio as of May 3, 2024 are: SMCI, NVDA, CVNA, QQQ, DKNG, UBER, SPY, INDA, CRWD, NFLX. 

4.        My second investment portfolio is worth 9%. 

This one has mostly “Risky” stocks. I have list of 150 stocks, where I buy $3 worth in each of those 150 stocks on weekly basis. I spend 15 minutes or so each week - to adjust this portfolio - if there is a stock which needs to come out from recurring buying. However - I do not sell anything from this portfolio and plan to do that till March 2031. This portfolio also has Bitcoin and Ethereum. I buy $2 worth of Bitcoin and Ether on daily basis from last couple of years. My overall contribution to crypto so far has not went pass 1% of my net worth and I intend to keep them below 3% at all times to manage the risk. Crypto is worth close to 15% of this particular portfolio though. 

Top 10 Largest Stocks in this portfolio as of May 3, 2024 are: CVNA, MSTR, APP, COIN, MNMD, PLTR, SHAK, HOOD, FROG, OSCR. 

5.         My Main Trading Portfolio is worth 13.73% 

I trade regularly in this portfolio - on a daily basis. It is mix of stocks and options. Holding period in this portfolio could be as little as 5 minutes (for 0 Dated Options) to 3 to 6 months. Once the stock is out of the “Trend” - I do not keep it in this portfolio. I have a strict rule of 8% Stop loss (if it is a stock). So, When I tweet that I bought (this stock or option), I mean it in this portfolio. I rarely post my exit - because it depends upon individual people’s risk tolerance. I get out of the position much quickly. Unlike my “Investment” philosophy and technique - trading is an art that I have not yet mastered. This is work in progress and I keep learning new methods daily basis. Mantra of this portfolio is - Whatever works - and whatever that gives profit. 

6.         Small Options portfolio is worth 2.61% 

Usually, I buy only LEAPS in this portfolio. For options which are expiring on 0 Days, 5 Days or monthly gets traded in main trading portfolio, However, longer dated options which are 3, 6, 12 and sometimes 24 months away, I keep them in this portfolio. I do not check this portfolio on daily basis - may be once a week - when I need to buy or take profit or loss. 

7.         Small Stock Portfolio for “Weekly Picks” is worth 2.79% 

In this portfolio, I select 20 stocks that I buy on Monday Morning and sell them on Friday close. M1 Finance (Trading App) does this automatically, I just need to select which 20 stocks. I spend roughly 2-4 hours each week to scan through 200+ charts manually - to see which stocks are looking attractive enough to keep them in this portfolio. This preparation also helps to trade actively - as I would be monitoring those stocks - their levels - call flows - news surrounding them very actively for that particular week. I measure my performance against “SPY” each week - and I have been on losing side in both 2022 (bear market) and 2023 (bull market), but so far for first 4 months of choppy 2024 market - I am able to beat SPY regularly (and overall). Also I feel I am getting better at trading/investing. 

8.         Last but not the least - my company stock (where I do my day job) is worth 1.65%

Diamond Hands

I have a colleague whom I occasionally share lunch with. Two years ago, when Tesla's stock price peaked at around $414 per share (post-split), nearing a $2 trillion valuation, he invested in Tesla shares. I was skeptical and questioned his decision. I asked, "Did you invest all the money you intended to, or do you plan to add more?" He replied that he had invested all at once.

Another acquaintance mentioned that they had bought CVS stock five years prior, and its price hadn't moved since then. Even after another two years, there was no change. While I refrained from openly criticizing their choices, I couldn't help but think they might be making mistakes. Instead, I checked in on them every three months, asking if they still held onto their stocks. Their response was always, "Yes, we're holding on; we have diamond hands."

It seems they might not grasp that, over more than two years, they haven't gained anything and may even be losing money. Furthermore, not only are they potentially losing in the stock market, but inflation is also eroding the value of their money.

I wonder why some people, unfamiliar with the stock market, invest significant sums in just one or a few stocks, only to lose money and then conclude that the stock market isn't for them. If they haven't made an effort to learn about investing, perhaps they should expect these outcomes. The Tesla investor told me recently, "I've done my part; I've also bought a new Tesla. Now it's up to Elon." This kind of perspective leaves me shaking my head in disbelief.

Top Dividend Payers in main account - Annually

 

Advice

No one learned swimming, by reading book about swimming. Another example might be: If you remember, the first time, you saw people playing cricket - you were either attracted to "Ball" or "Bat"; You might have either picked up the ball - and threw it (underarm or overarm) or Perhaps you were attracted to the bat - and tried to "Hit" the ball - You might have missed the ball or hit it. Point is - you did not say to the folks who were playing cricket - wait, let me read a book about cricket - or explain me how to play this game. You just jump right into it - and learn it as and how it happens. 

Investing or Trading is very similar - You cant wait for books to read - and even if you do - you wont learn anything until you have a "Practical" knowledge. In trading - they say 99% of folks lose money - and most of them do - and it takes years before you create a system that works for you - which can consistently reward you with money. 

Even veterans like Buffett makes mistakes. You will make a mistake. But, its up to each individual that how they can minimize those mistakes, use them as learning opportunities and move forward. Because if you survive few years of damage, the amount of money that you can make - you wouldnt have even dream about it. More than money - it will become part of your life - until you die. Also it teaches you various aspects of life - interests you to the areas, that you might have never learned. 

It is not "Easy", nothing in life ever is easy - until you do it and once you do it - Its not "Rocket Science" either. 

Money - Where is it?

119 Trillion in Entire World “Bond” Market.
109 Trillion in Entire World Stock Market.
52 Trillion in US Housing Market
49  Trillion in USA Stock Market
46 Trillion in USA Bond Market.
34 Trillion USA Govt Debt
25  Trillion GDP United States in the year 2022.
25 Trillion US Commercial Real Estate: 
13.7 Trillions is total worth of Gold in the entire World.
13.6 Trillions in IRA Accounts.
9.7 Trillions in Wages each year in USA. 
7.4 Trillions in 401K accounts
6.4 Trillions in Money Market Funds. 
6.2 Trillion United States Govt Spending
4.5 Trillion United States Govt Revenue
2.74 Trillions worth of total CryptoCurrency in the world.
2.26 Trillions US dollars in circulation.
0.5 Trillion worth of Gold Reserve in USA

Inflation CPI Prediction for March 2024

#Inflation, #CPI Prediction for upcoming week We will get 0.3% increase in MoM data and YoY numbers will be around 3.10% for March 2024. We will NOT go below 2% target of Fed in inflation print, anytime this year, but will spend most of the year in between 2 to 3%. At some point, this year, Fed will realize, 2% target is incorrect and we should be ok with 2.5% Inflation in YoY and cut rates.

Top 5 Indian Cricketers from Each Decades

Following are top 5 Indian cricketers from each Decade:

1940's: Lala Amarnath, Vijay Hazare, Hemu Adhikari, CS Nayudu, Syed Mustaq Ali

1950's: Polly Umrigar, Pankaj Roy, Vijay Manjrekar, Subhash Gupte, Vinoo Mankad

1960's: Chandu Borde, Mansur Ali Khan Pataudi, Farokh Engineer, Erapalli Prasanna, Bapu Nadkarni

1970's: Sunil Gavaskar, Gundappa Viswanath, Bishan Bedi, S.Venkataraghavan, B.Chandrashekhar

1980's: Kapil Dev, Ravi Shastri, Dilip Vengsarkar, K.Srikanth, Mohinder Amarnath

1990's: Sachin Tendulkar, Mohd Azharuddin, Anil Kumble, Javagal Srinath, Navjot Singh Sidhu

2000's: Rahul Dravid, Yuvraj Singh, Harbhajan Singh, Zaheer Khan, Saurav Ganguly

2010's: Virat Kohli, M.S.Dhoni, Rohit Sharma, Ravindra Jadeja, Ravi Ashwin

2020's: Jasprit Bumrah, Rishabh Pant, Shubhman Gill, Hardik Pandya, K.L.Rahul 

*Limiting entry for each player in only one decade, else Tendulkar, Gavaskar, Bedi might have been easily picked for two decades.