Trade Justification of Investment Portfolio Strategy

Here in this section we will cover information about our buy and sell decisions for the presented below companies’ stock. See detailed justification and explanation for each decision.  

Google stock prices (GOOGLE)

During the last month news came that Google stock prices will goes towards decrease because of changes in accounting rule and their policies in the company. Foreign currency exchange rate fluctuation was also a major cause of this problem (PRESSMAN, 2019). In accordance to the news stock surge was huge step that could influence the prices of stock in the market. Decrease in stock prices was expected to decrease organizational net profit of the fiscal year. Somehow, unexpected increase in the revenue of 1st quarter forecasted that overall revenue will increase up to $30.29 billion with increase in EPS of 9.28. In the beginning of April 2019, news engaged out attention towards the possible increase of stock value because of Google reports of 1st quarter performance. Understanding this situation, we took a decision to buy 100 shares of the company at price $1150. We later sold some of these shares at $1263.52 and secured profit of 11352 total on 100 shares.     

Netflix stock prices (NFLX)

Netflix Prices are changing continuously from last few years. Whenever, business gets stability stock prices goes up in the open market. While on the other than changes in the competitive market bring down the market value of stock offered by Netflix Company. While investing in the Netflix Company we conducted market research and analyzed share prices fluctuation to find a prime opportunity for investment (Kalogeropoulos, 2019). In the beginning of 2019, Netflix claimed that company is expecting increase in the overall profit of first quarter by 16%. Subscribers growth (as 29 million people subscribed Netflix) in 2019 was the indicator of potential increase in the financial position for the 1st quarter of the fiscal year. But Netflix failed to surprise Wall Street with their business trajectory. Financial performance of latest quarter was not according to the expectations of the investors and administration of the company.

Netflix Investment Portfolio(NFLX)

We had stock of 300 Netflix shares in our investment portfolio. We were looking for an opportunity to select put option for these shares. In the beginning of January when news came out about the possible increase of profit, EPS, and net income we took a decision to buy undervalued shares of Netflix. We purchased 300 shares in January. We bought shares at market value of $290.23 in the first week of January and sold that shares at market value of $382.88. The total sold quantity was 250. Thus, we earned profit of 23162.5 on 250 shares.  

Netflix financial performance (NFLX)

As the news came out about the unexceptional financial performance of 1st quarter, we forecasted the potential decrease in stock prices. Jumping on this opportunity we took a decision of short selling. We borrowed stock (350) for short selling. We shorted 350 shares at $399.12 per share and covered our position within 3 days at $382.88 per share. Thus, we covered 5684 on 350 shares. 

Netflix market to grab (NFLX)

After getting huge profit of 23162.5 selling 250 shares in the market at short selling we again took a decision to purchase more stock from Netflix market to grab on opportunity to get more profit by selling these shares. Considering this we again selected call option and bought almost 250 more shares of Netflix Company before the start of April 2019. Somehow, this time we realize that our decision was wrong. Price neither goes towards decline nor towards increase. At the time of buying stock per share market value was $382.88 and when we sold shares at one-week prices were as $383.72 per share. Thus, we only earned profit of $210 on 250 shares. In other words, we earned profit less than $1 on each share.     

Apple Inc. stock (AAPL)

Apple Inc. stock is on tear. News present that stock is up over 43% since January 2019 (Leswing, 2019).  In the beginning of 2019, we got new about decline in the share prices of Apple Inc. Having believe on Apple stock market we purchased 300 Apple shares at open market value of $180.99. After waiting one week we sold 300 shares at market value of $204.43 and earned total profit of $7032.

Nike stock (NKE)

Nike shoes selling company is working efficiently in the market. Like other companies Stock prices are not rigid or fixed for Nike Company. Increase in market demands leads towards increase of market value per share (LARKIN, 2019).

Analysis the stock market situation of Nike Company (NKE)

Analysis the stock market situation of Nike Company we found that stock prices are going towards increase in future therefore we purchased 200 shares at 70 per share prices and sold later at 87.57. This is how we earned 3512 on 200 shares sales.     

Purchased 200 shares of Nike Company (NKE)

Because of good experience in we again purchased 200 shares of Nike Company from open market at market value of $86.55 per share. Somehow, prices remained almost same after this buying decision so we found it an inefficient investment. Investing this amount in other companies we could get profit higher than this. So we decided to sell out these shares immediately when prices goes up. During this week prices went up to $87.57 each. We accepted this offer and sold 200 shares at $87.57 each to earn profit of $204 (almost $1 for each share).   

Graphs and Charts Summary of stock prices information for Netflix

The following graph presents the historical and fore casted stock prices information for Netflix.

The presented below graph projects account values for all stock options.

Conclusion on investment strategy portfolio

Investment project was based on managing investment portfolio by buying and selling the right type of securities and shares at the right time. In this project, we bought a number of shares from Netflix, Nike, Google, and Apple Company with different volumes. By managing this portfolio effeicnetily we earned profit on more than 50% shares. During this project, we learned that portfolio management require deep attention and interest in the stock market business. With experience and enough attention we cannot manage portfolio efficiently.           

Reference of investment strategy portfolio