Saturday, May 14, 2011

Salesforce.com (CRM)

Since our first trade at $15.67 back in September 2004 our total return on investment trading Salesforce.com is 728.2%. If you'd simply held the stock over that same time period you would have realized a 760.9% return. Doing the math, our results clocked in at 95.7% of the basic buy-and-hold strategy, so our grade on this one is an A. And just so you know, I grade on a curve.



1. LONG the week of 9.13.04 at $15.67. My stop was $9.27, so the initial risk (R) on the trade was $6.40. Stopped out and reversed to short at $15.00 the week of 1.10.05. The percentage loss on the trade was -4.3%, and the reward-to-risk ratio was -$0.67/$6.40 = -0.10. 

2. SHORT the week of 1.10.05 at $15.00. Using $20.85 for a stop, R = $5.85. Stopped out and reversed to long at $18.49 the week of 5.16.05. The percentage loss on the trade was -23.3%, and the reward-to-risk ratio was -$3.49/$5.85 = -0.60.

3. LONG the week of 5.16.05 at $18.49. With the stop set at $13.24 my risk was $5.25. Stopped out and reversed to short the week of 5.8.06 at $31.20. The percentage gain on the trade was 68.7%, and the reward-to-risk ratio was $12.71/$5.25 = 2.42.

4. SHORT the week of 5.8.06 at $31.20. The stop was $40.12, so R = $8.92. Stopped out and reversed to long at $32.85 the week of 8.14.06. The percentage loss on the trade was -5.3%, and the reward-to-risk ratio was -$1.65/$8.92 = -0.18.

5. LONG the week of 8.14.06 at $32.85. With $21.67 for my stop the risk on the trade was $11.18. Stopped out and reversed to short at $50.65 the week of 9.22.08. The percentage gain on the trade was 54.2%, and the reward-to-risk ratio was $17.80/$11.18 = 1.59.

6. SHORT the week of 9.22.08 at $50.65.  The stop was $71.15, so that means R was $20.50. Stopped out and reversed to long the week of 3.30.09 at $37.27. The percentage gain on the trade was 26.4%, and the reward-to-risk ratio was $13.38/$20.50 = 0.65.

7. LONG the week of 3.30.09 at $37.27. My stop was $23.04, so the risk on the trade was $14.23. Closed last week at $134.91 with a $118.86 stop. The percentage gain on this trade is 262.0%, and the reward-to-risk ratio is $97.64/$14.23 = 6.86. 

Bottom Line:
Winning Trades: 4 | 57.1% | $35.38/share avg.
Losing Trades: 3 | 42.9% | -$1.94/share avg.
Average Trade: Gain of 54.1% | $19.39/share | Reward-to-Risk Ratio (R): 1.52

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