Warren Buffett is worth $100 Billion and recommends investing in the S&P 500. 25% of the S&P 500 is made up of only 5 stocks, let’s discuss each stock:
~25% of the S&P 500 is made up of only 5 stocks:
• 7% Apple $AAPL
• 6% Microsoft $MSFT
• 4% Google $GOOGL
• 3% Amazon $AMZN
• 3% Tesla $TSLA
The S&P 500 is America’s largest companies, and returned ~11% each year on average, over the last 96 years. The S&P 500 is also:
• 1% NVidia $NVDA
• 1% Meta $META
• 1% Disney $DIS
• 1% Costco $COST
• 1% Walmart $WMT
• 1% Mastercard $MA
Let’s discuss each stock and it’s bull case:
Apple $AAPL:
• Apple Pay is the #1 mobile payment system in US
• Apple iCar & augmented reality products in pipeline
• 1.5 billion+ active devices, with devices replaced every few years
Data shows great:
• Profitability
• Institutional Flow
• Upside Breakout
Microsoft $MSFT:
• Dominant in cloud computing space
• Azure growing faster than Amazon’s AWS
• Azure has a large & constantly growing market for the cloud computing market space
Data shows great:
• Profitability
• Institutional Flow
• Upside Breakout
Alphabet/ Google $GOOGL:
• MOAT on online ad market
• Leader in quantum computing
• Strong balance sheet & healthy cash flow
Data shows great:
• Institutional Flow
• Upside Breakout
Amazon $AMZN:
• Largest in cloud infrastructure space
• Health care spending accounts for ~20% of the economy & they have a growing health care services business
Data shows great:
• Dark pool activity
• Institutional Flow
• Upside Breakout
Tesla $TSLA:
• MOAT over other EV’s due to low battery costs, self-designed A.I. chips & data collected from billions of miles of real-world driving from its customers
Data shows great:
• Growth
• Profitability
• Options Sentiment
• Institutional Flow
• Upside Breakout
Nvidia $NVDA:
• Best graphics chips & exposure to many themes such as artificial intelligence, machine learning, metaverse, digital biology, robotics, autonomous vehicles, cloud computing, IoT & 6G
Data shows great:
• Options Sentiment
• Institutional Flow
• Upside Breakout
Meta $META:
~80% of the World uses its products (Facebook, Instagram, Messenger & WhatsApp share ~4 billion monthly active users)
Data shows great:
• Profitability
• Dark pool activity
• Institutional Flow
• Upside Breakout
Disney $DIS:
• Disney great content in their pipeline
• This may be the busiest season for Disney parks (due to pandemic ending, travel restrictions being lifted & holiday season)
Data shows great:
• Profitability
• Options Sentiment
• Institutional Flow
• Upside Breakout
Costco $COST:
• One of the strongest balance sheets
• Consistently beats earnings estimates
• One of the most loyal customer bases (90%+ membership renewal rate in North America)
Data shows great:
• Profitability
• Institutional Flow
• Upside Breakout
Walmart $WMT:
• 47-years of dividend hikes
• Only American retailer that can complete with Amazon
• Many retailers won’t survive this recession, and their losses will be Walmart’s gain
Data shows great:
• Profitability
• Institutional Flow
• Upside Breakout
Mastercard $MA:
Exponential growth in smartphones, e-commerce, mobile banking & mobile payments will benefit (80% of World’s transactions are still done with cash/check)
Data shows great:
• Profitability
• Options Sentiment
• Institutional Flow
• Upside Breakout
If you want to pick better stocks long-term, consider these 5 signals:
1) Profitability- How likely the company is to be profitable over the next few years
2) Growth- How likely a company is to get bigger in revenue and/or size
3) Market Similarity- how closely the stock will follow the movement of the S&P 500
4) Upside- Chance of sharp move upwards in price any time within the next 1–2 years
5) Downside- chance of sharp decline in price any time within the next 1–2 years
If you want to swing trade better stocks short-term, consider these 5 signals:
1) Institutional Flow- If institutions are buying up or selling off a stock or options
2) Options Sentiment- How long or short the market is on short duration options
3) Dark Pools- Amount a stock trades in Dark Pools relative to the total trading volume and number of shares
4) Shark Rating- Measure of the trustworthiness of the institutions that own a stock
5) Short Pressure- Market forces pushing the stock price down and the potential to move sharply up or down
*Data and images are from the http://Prospero.AI app. The app provides data that hedge funds use to make trading decisions.
**Refer to the app, as signals change!
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