Wednesday, May 11, 2011

Apple (AAPL)

We started talking about total return on investment with Akamai Technologies yesterday, so what about the current value of just $1 invested/traded in Apple back in May 2003? 

Based on the 7 trades detailed below, the current value of that dollar is now $31.05. That's a total return of 3,005.2% over 8 years. Of course, just like with Akamai, a basic buy-and-hold approach covering the same time period would have generated slightly better results: a 3,688.6% return on investment. I'm going to give myself a B- on my Apple trading. 



1. LONG the week of 5.5.03 at $9.15. Using $7.03 for my stop, the initial risk (R) on the trade was $2.12. Stopped out and reversed to short at $63.19 the week of 3.6.06. The percentage gain on the trade was 590.6%, and the reward-to-risk ratio was $54.04/$2.12 = 25.46. 

2. SHORT the week of 3.6.06 at $63.19. With my stop at $81.60 the R was $18.41. Stopped out and reversed to long at $68.30 the week of 7.31.06. The percentage loss on the trade was -8.1%, and the reward-to-risk ratio was -$5.11/$18.41 = -0.28. 

3. LONG the week of 7.31.06 at $68.30. Our stop was $51.80, so R = $16.50. Stopped out and reversed to short the week of 1.22.08 at $130.01. The percentage gain on the trade was 90.4%, and the reward-to-risk ratio was $61.71/$16.50 = 3.74.

4. SHORT the week of 1.22.08 at $130.01. With my stop at $187.58 the risk was $57.57. Stopped out and reversed to long at $161.04 the week of 4.14.08. The percentage loss on the trade was -23.9%, and the reward-to-risk ratio was -$31.03/$57.57 = -0.54.

5. LONG the week of 4.14.08 at $161.04. My stop was $118.71, so R = $42.33. Stopped out and reversed to short the week of 9.8.08 at $148.94. The percentage loss on the trade was -7.5%, and the reward-to-risk ratio was -$12.10/$42.33 = -0.29.

6. SHORT the week of 9.8.08 at $148.94. Setting my stop at $188.95, the R on the trade was $40.01. Stopped out and reversed to long at $115.99 the week of 3.30.09. The percentage gain on the trade was 22.1%, and the reward-to-risk ratio was $32.95/$40.01 = 0.82. 

7. LONG the week of 3.30.09 at $115.99. The stop was $84.39, so R = $31.60. Closed last week at $346.66 with a $311.05 stop. The percentage gain on this trade is 198.9%, and the reward-to-risk ratio is $230.67/$31.60 = 7.30.

Bottom Line:
Winning Trades: 4 | 57.1% | $94.84/share avg.
Losing Trades: 3 | 42.9% | -$16.08/share avg.
Average Trade: Gain of 123.2% | $47.30/share | Reward-to-Risk Ratio (R): 5.17

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