Top Names, 4/10/2025
A note about our top names in bear markets, then on to continuing our core strategy while updating our top names performance.
A Bear Market Note
A reminder about what our system does in a bear market: Portfolio Armor’s security selection algorithm is agnostic about market direction—it’s just trying to find securities that it estimates will do well over the next several months. And those securities don’t have to be stocks. In fact, one of our top ten names tonight is a leveraged inverse ETF. In a bear market, I would expect to see more of those in our top names.
If you are worried about further downside, as a reminder, you can download the Portfolio Armor optimal hedging app by aiming your iPhone camera at the QR code below (or by tapping here, if you're reading this on your phone). Our app can help you find the least expensive hedges given your risk tolerance and time frame.
Our Core Strategy
Our core strategy is to buy equal dollar amounts of the Portfolio Armor web app’s top ten names, put trailing stops of 15%-20% on them, and replace them with names from the current week’s top ten when we get stopped out of a position.
Another Use For Our Top Names
We also use our top ten names as a source of ideas for options trades, such as this one on Spotify last week:
Calls on Spotify (SPOT 0.00%↑). Bought for $1.67 on 4/1/2025; sold (half) for $4 on 4/2/2025. Profit: 140%.
A similar trade on SPOT this Monday would have done well too, but our exits so far this week have been on the bearish side:
Puts on Apple ( AAPL -6.28%↓). Bought for $1.50 on 4/9/2025; sold (half) for $4 on 4/10/2025. Profit: 167%.
Puts on Nvidia (NVDA -6.09%↓). Bought for $1.56 on 4/9/2025; sold (half) for $4 on 4/10/2025. Profit: 156%.
A Top Names Performance Update
Before we get to this week’s top ten names, let’s look at the final, 6-month performance of our top ten names from October 10th, 2024.
Our top names from October 10th were down 11.29%, on average, over the next six months, versus down 8.95% for the SPDR S&P 500 Trust (SPY 0.00%↑).
Note that if you were following our core strategy, you would have gotten out of CYH 0.00%↑ and PCVX 0.00%↑ when they were down about 20%, so your performance over this time period would have been considerably better.
So far, we have 6-month returns for 94 top names cohorts since we started this Substack at the end of December, 2022.
And as you can see above, our top names have averaged returns of 17.81% over the next six months, versus SPY’s average of 11.45%. You can see an interactive version of the table above here, where you can click on each date and see a chart showing each of the holdings that week.
This Week’s Top Names
Below are Portfolio Armor’s current top ten names as of Thursday’s close.
Screen capture via Portfolio Armor on 4/10/2025.
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 of 15% to 20% on each of them. As you get stopped out of positions, you’ll add new ones from the then-current top ten names.
Have you considered incorporating a macro aspect to your analysis.
For example, weakening economics becomes a negative for cyclicals; or legislative changes becomes a potential positives for the eth and btc families of listings?