It was at the University of Michigan in the 1970's where I first read Henry Hazlitt's Economics In One Lesson. The "lesson," is more like a sentence: "The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups." There is an entire Economics 101 and 102 first year college course in that sentence, and book, all for less than 10 bucks on Amazon. But I digress. How To Trade Stocks In One Lesson Don't. Stocks are meant to be bought and held commensurate with your investment conviction. Anything less than a long term conviction should be eschewed in favor of a stock that does hold your long term conviction. Toward that end we have been holding a basket of stocks, some as far back as December 2019 (I wonder which one that is) with all but two generating stellar returns. I've long ago abandoned the "diversification," mantra in favor of keeping all or most of your eggs in one basket, then watching that basket very closely. Accordingly we will be removing the bottom two underperforming stocks, JMIA and VALE, from the group and for the immediate future will be focused on TSLA, PLTR and Bitcoin (GBTC and/or MSTR). Tesla TSLA closed Friday at $909.68, its highest closing price ever. Since banging the table for it December 2019 it is up 1200%. Over the past 12 months it is up 116%, 28% YTD, 41% in the past three months, 21% in October and 7.5% just last week. Juggernaut works for me, as it not only encapsulates what came before but also suggests what it still to come. Speaking of which, our updated TSLA Long Term chart: In the spirit of long term not-trading concept set out above, I consider 2023 and 2024 LEAPS equivalent of holding shares, but also in the spirit of an option trading service see opportunities in trading in and out of some nearer term options, I am looking at mid-2022 calls for an intermediate term option position. Expect a recommendation early next week. Juggernauts don't come by that often and when they do, we should be jumping all over them. In other words: Option trading in one lesson.
