Top Names, 5/18/2023

Continuing our core strategy.

This Week’s Top Names

One of the names in this week’s top ten is a blast from the past for me: the at-home teeth straightening company Align Technology, Inc. ( ALGN 0.00%↑). It was a top Portfolio Armor name when we first started tracking the performance of our top ten names almost five years ago. Over the next six months, it climbed more than 57%.

It will be interesting to see what it does over the next six months.

Below are Portfolio Armor’s current top ten names as of Thursday’s close.

Screen capture via Portfolio Armor on 5/18/2023.

If you’re starting our core strategy now, you’ll want to buy equal dollar amounts of each at or near these prices, if possible, on Friday, and then enter trailing stops on each of them. Initially, I was using 10% trailing stops on all positions, but I extended that to 15%. As you get stopped out of positions, you’ll add new ones from the current top ten names then.

In my case, I am already running this strategy, and I got stopped out of Prothena Corp., Plc (PRTA 0.00%↑) this week (after a 34% gain), so I plan to add PulteGroup, Inc. ( PHM 0.00%↑ ) on Friday.

If you’re not buying round lots of each of these positions, it won’t be cost effective to hedge them individually, but you can hedge market risk by buying optimal puts on an index ETF such as the SPDR S&P 500 Trust (SPY). As a reminder, you can use our website or our iPhone app to scan for optimal puts.

Alternatively, holding some of our bearish bets can work as a hedge against market risk too.

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