I'm excited to share the results of the first run of my "hot stocks finder"!
After decades of investing, I learned I possess one very unique trait that most of my friends, most people on Reddit and most of my Uber drivers, seem not to have: missing on all the hot stocks. I missed on years of Apple appreciation, even if I work in tech and use a MacBook Pro to write this; I missed on Tesla, even if I had a chance to drive one ten years ago and loved it; I missed on NVIDIA, even if, as a software engineer, I was aware of the AI trends before it really took off.
So... I became curious with researching these super hot stocks in effort to get better at recognizing them at the right time.
Today I came up with the first question: "how often in history we encounter a stock that 10x in price in just 3 years?" - I'm not really interested in getting into penny stocks or special situations in which a stock 100x in 1 day because of unpredictable events. I am looking for relatively popular stocks, the ones that we all have heard about, at an inflection point: they launch a new product, they get into a new market, they come up with a new strategy and their business starts to take off, to double and then double and then double again... bringing the stock to 10x its initial price.
There are plenty of stock screeners only, so let me use them first: I had a little bit of success with inandout.com and finwiz.com, but I'm coming up with so many other ideas that I can only explore by having direct access to the data. QuantConnect is a platform that can help me with that, I just need to code the screener myself in Python (which if very far down the list of my favorite programming languages).
Code, test, code, test... I have version 0.1 in a couple of days and I'm ready to run it on the last 4 years of data.
The search starts from Jan 2021, nine months after the Covid low of March 2020.
I see the first log printed in the console, it's exciting:
GME reached $86.87 on 2021-01-27. It was $4.31 on 2021-01-04
Of course, GameStop! The meme stock that went ballistic in 2021. I'm thrilled to see that my script has correctly found a good answer to my question and that it is such a famous stock! After a few seconds, more logs:
SAVA reached $87.95 on 2021-02-03. It was $8.18 on 2021-01-06
SPRT reached $36.39 on 2021-08-30. It was $3.4 on 2021-06-07
CAR reached $339.34 on 2021-11-02. It was $33.67 on 2021-01-04
While the script is still running, I open a new tab and research the correctness of these other results.
SAVA: Cassava Sciences, a biotechnology company had positive early-stage data about his Alzheimer's drug candidate, simufilam. Similarly to GameStop, it was heavily shorted at the time, and the news cause an unprecedented short squeeze that 10x the stock in less than a month. So cool, I've found another interesting story in the data that I missed at the time.
SPRT, support.com, a small software company worth no more than $100M, also 10x in just 1 month between June and August 2021 after entering the hot cryptocurrency sector by announcing a merger with a cryptocurrency mining company.
CAR is actually Avis, the car rental company. When Hertz filed for bankruptcy in May 2020, Avis stock doubled and started recovering from the pandemic low. By the time my analysis started, in Jan 2021, it was already back at the same pre-pandemic levels and, from there, the business exploded, fueled by higher demand for rental cars as the travel industry rebounded, rental prices soared, leading to record profits for Avis.
Avis stock, 2021-2022
The script has identified 40 other stocks that 10x in the last 3 years. Isn't it incredible? How did we miss all of them? From a quick scan I recognize Carvana, MicroStrategy (known for their oversized holdings in Bitcoins), Abercrombie & Fitch, and of course, NVIDIA that 10x in about 18 months from October 2022 to May 2024.
This post needs some kind of visualization for this first analysis, so here it is:
One point for each stock that 10x, and the price it reached.
I know that the price itself does not have much of a meaning here, and even the timeline has limited meaning, because earlier in the data stocks did not have enough time to grow... but that's the only data I have from my first program. If you follow my updated on this blog I promise to come up with a comprehensive visualization of the last 25 year or so. If you have specific questions, please reach out.
This is fun and now I have a plan.
I'm going to use my little program to find these amazing investments through history; I'm going to use this blog to log my journey through the research, to write about the fun facts and the exciting data points I find.
I think a book would be cool, with selected stories of founders, companies and products, in depth data analysis on how each stock was able to perform that well, and a final reflection on the overall characteristics of these investment and how you and I can recognize them as they happen.
If you find this interesting and you want to follow along, please subscribe or reach out with any questions or idea.
Rally up,
R.F.