28 October 2016: Tesla or not Tesla, that is the question

teslaAfter making a profit for the first time in its company’s history, Tesla got both a price-target boost and a sell rating yesterday. It is not easy for investors to get a grip on the electric car maker. Are Tesla cars just ordinary cars with a different fuel tank or are they game changers? Will Tesla take a large slice of the automotive market or will it have a smaller, but perhaps more profitable market share? Will traditional automakers catch up easily with Elon Musk’s brainchild once they pick up steam (no pun intended) or will the Fords of this world reach the end of their life cycle in the next years? Far too many factors to control for. Buying Tesla stocks is either a matter of belief or a wild bet. It is totally clear why investment advisers differ widely on the current valuation of Tesla stocks.

white-chapel-logo-smallYesterday, investors were once again not too happy with the latest round of earnings reports. US market closed down. Bonds were also falling, so investors are not sure whether the stock markets are able to mitigate the effects of an interest rate hike. Amazon disappointed in the after hours. Markets might not end the week on a positive note.  Our UVXY ETFs did not mind and made another substantial gain: 3.6%. Our return for the year added 12 percentage points and now stands at 234%. Return for the quarter is approaching 10%.
White Chapel is getting slightly less in favor of volatility, but sticks to its advice to keep our UVXT ETFs. So, that’s what we will do.

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter

$33,379

+233.79%

+233.79%

+9.0%

Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 340%.

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René’s Reflections @ Friday: Are they so stupid?

Every now and then, someone asks me, “If you two guys can make such high returns with your investment model, why is it that the investment banks don’t do at least the same? Are you so smart, or are they so stupid?
We are just two guys who decided to join forces one day, and to focus on one big challenge: to see if it is possible to ‘beat the market‘. And after almost two years of hard work, digging into the matter with the tenacity of a bull terrier, we ended up with an investment model that consistently delivers triple-digit annual returns.
It is said, that beating the market is one of the most difficult endeavours investors can think of. In fact, it is generally considered virtually impossible to earn a year over year investment return greater than that of the S&P 500 index. Many books have been written about this subject, which is also known as ‘the holy grail of stock trading’. An annual return of 7% on average is widely seen as the standard reference for a good investment strategy. Any strategy that will deliver more than that, would effectively ‘beat’ the market. In other words, we are conditioned to see a 7% annual return on investment as ‘good’.
Some investment banks try to seduce you with higher returns: 9%, wow! But it makes you think: how on earth can it be, that these big and powerful investment companies, with their incredible computing power, and their huge research departments with highly qualified scientists, are apparently not even able to beat the market by a significant margin? Are these meager returns really all they are capable of?
I don’t think so. If I had to bet on it, I would say that they must be smarter than us. So then the question is: what do we think happens with the annual returns between their 9% and the triple digit annual returns they should be making behind their screens? Exactly!