Abhinav Singh has made winnings on Tesla, GoPro and Netflix
Tech stocks are notoriously hard to predict before they become famous. With so much competition and a breakneck pace of new technology development, it’s hard for many investors to find the next big thing. For all the winning examples like Facebook, Google and Amazon, there are companies that have lost some sort of race.
One trader from Santa Barbara in California has managed to predict three of the star companies in the last couple of years, even before they hit the headlines and he did it by simply observing what’s happening around him.
Abhinav Singh’s first selection was in 2012 when his attention was caught by the announcement by Netflix that they would be producing two interesting TV series, but would make them only available for their own subscribers – “Orange is the New Black” and “House of Cards.” He bought at $63.5 and sold later at $186.
His second big trade was Tesla. They came on his radar when he started seeing more and more of their cars on the streets around him. After reading up on the company and its product pipeline he entered the market at $55 in May 2013 and exited at $180 in January. GoPro became his third hit after he noticed the surge of online videos made with their cameras.
The jist of this approach is selecting a company or stock that is relatively unknown, but has a great product offering (Trading 212 added 30 new stocks recently). This is very often the foundation of upward price movement – simply having something better that clients want. Mass appeal, or predicting it, is something traders and the supporting army of analysts try to find on a daily basis. Then come their trades, either expecting a large upswing, or simply riding a strong trend.
This style is also defined by three other variables: its trade duration, the amount of the investment and the number of trades that are made. Here the focus is on the mid to long-term picture, expecting large movement in the coming months and then banking on it. The invested amount is high and is concentrated in only several stocks without too many trades to add or reduce the invested amount.
We shouldn’t forget that this is a success story – the approach is with a high risk level, which isn’t recommended for everyone, not to mention that Mr Singh had losing positions in Twitter and Yahoo, albeit smaller. There is also the point to remember that there was someone on the other side of his trades that did lose, but what Abhinav’s example does give us, is how preparing and doing research by yourself, as well as being confident enough to trade on them, is what can bring success (and the ability to pay your tuition fees.)
Tesla and GoPro are all available for trading in the Trading 212 PRO Platform.