Over this 1 week period, I have made a 30% return on capital.
This bet of mine was made because of a historical price trend on Netflix's share price.
I bought my shares last week at $324 and sold them this week at $422.
The shares could go higher but I felt that it was good enough to make 30% in a week so I sold it.
But the main idea is the strategy used because of this investment bet.
What is interesting is the past 5 years' historical price movement from January to February.
2014 Jan-Feb
2013 Jan-Feb
2012 Jan-Feb
2011 Jan-Feb
2010 Jan-Feb
We can see from the 5-year historical (2014, 2013, 2012, 2011,2010) performance that for the period of January to February, Netflix faces a 100% probability of having a minimum 10% increase in share price.
This year adds to it as the 6th consecutive year this trend is accurate - it is actually more than 6, but showing data going beyond 5 years in this article is not my main point.
While there is a tendency for the price to continue rising until mid-Feb or March, I sold my position because it was added on leverage for this one-time gain.
The price trend is only 1 of the 2 reasons I invested in Netflix.
The other is that its price had hit a 1 year low, showing support at around $310-$320 area (look at the first chart).
It is based on these 2 reasons, I invested in Netflix last week for a short 1-time gain.
I believe there are many more companies with such potential/trends.
One of them I believe is Amazon.com - the E-Commerce Gaint.
I will be posting about Amazon.com's trend next week if this strategy is one that works or one that I was just lucky.
Stay Tune~!
PS: The strategy for this investment was derived from the book below.
Although the full strategy is not from this book but based on my understanding of the original strategies, the fundamental idea is similar.
We buy on low prices or undervalued fundamentals compared to the past, such as near-bottomed prices and historical trends.
