Alpesh B. Patel OBE describes a data-driven strategy for 100-300% gains, using criteria like strong value, growth, cash flow, and rising MACD signals. He sizes positions from 2.5-5% up to 50% once evidence meets his hurdle rate, and uses Seagate as an example of how the approach works.
It's gone to 160, right? What I'm saying is what we're looking for, not yet, because we don't have enough evidence, is that to go from there to about 300, which is only a 50% rise. At the moment, what we have for boosting confidence is value, growth, income, cash flow, Sortino Alpha, rising MACD weekly and monthly simultaneously. And then we expect, as here, a tenfold rise. However, it happens too infrequently, and I need more confidence to increase from 2.5% to 10% to 20% to 50%. Because if I had 50% of my money in there, I'd be laughing. So, do you see what we're trying to do? And we haven't got that yet beyond what we've got already. And what we've got already only lets me put in 2.5% to 5%. And you might say, well, no, surely it's all of those factors plus this, but we're testing the data on it. Look, either you're going to hold 5% in your portfolio as a dampener or you're trading. If you're trading, if you run a trade at any exchange, trade fund or commodity, it's really simple. MACD, 1 month, that or Yahoo Finance or Google Finance. And if that's rising, look to build. If it's falling, look to get out. Do pattern recognition, see it. Major problem, you ain't got the time to do that. You think you have, you haven't. It's like my gym membership. You start with good intentions, you eff it up. You're just going to end up losing a lot of money, or in my case, getting fat, okay, and paying gym fees. Now, where do we think we might see another good strong gain repeating that pattern that we're looking for in Seagate? Now, I don't think it's gonna be a tenfold increase, okay, but if I give you an example of what we're trying to look for and what we're sharing with clients— I don't normally share too much that we're sharing with clients— if we this and we're not yet, but we see that we're not yet. I want somebody going, eh, where'd you think it's gone to 160? Right. What I'm saying is what we're looking for, not yet, because we don't have enough evidence, is that to go from there to about 300, which is only a 50% rise. But what we're looking for is these kinds of explosive gains, 100 to 300 or more. Now, it requires those two things. And it also requires all of these to be green. Okay, that's when we get the ones where they'll meet our criteria. So as you can see, very stringent criteria. But why stringent criteria? Well, because we've got very high hurdle rate. We really want a good high return. We're not looking for pissball returns, and we want securities with low drawdowns like this, and we want the ability to exit whenever we see that pattern like this.
