My stock picks
The current bull market has lasted for more than 12 years, and the economic cycle does not seem to have functioned as expected in recent years. The Nasdaq index is an obvious indicator of this.
We don’t know why, and neither do professors or economists. But I believe nothing lasts forever. I have a strong gut feeling that a turning point is near, which compels me to take a snapshot of my investments and jot down some thoughts — essentially justifying my choices.
Investing isn’t my profession — it’s just a hobby. I spend a few hours a week reading, watching, and reflecting. I only pick and hold stocks — I never short or dabble in options.
So how do I pick stocks? Simple and straightforward —
Industry
I’ve built my entire career in IT (Information Technology), so it’s no surprise that nearly all my picks are technology companies. My background and expertise in technology allow me to analyze these companies more deeply and make informed decisions.
Invest on the companies you understand.
Benchmark
Setting a benchmark helps you evaluate a company’s growth potential. Looking at a single company’s financials over a 5–10 year window can be challenging due to factors like economic shifts, inflation, and monetary policies. It’s hard to gauge what $1 billion truly represents in the market.
Benchmarks simplify this by providing a comparison. For example, in the past five years, MSFT grew 4x, AAPL grew 3.5x, and even your restaurant bills likely tripled.
With 3.5x inflation as a baseline, it makes sense to evaluate similar companies in a similar context — like spotting opportunities when Google was priced at $88 or Amazon at $87.
Invest on the companies that under valued due to inflation discount.
Trend
Trends shape the world, and staying aligned with them is crucial. Hot topics emerge, capturing global attention and driving change. While you may discuss them, it’s important to think about the underlying demands and the companies meeting them.
Take ChatGPT, for example — it became a global sensation overnight. AI is now reshaping lives and redefining priorities for tech companies. However, only a few giants can train large language models (LLMs), and they depend heavily on “chips.” This creates opportunities for chip designers. NVIDIA (NVDA) leads the pack, but competitors like AMD and Intel are also riding this wave.
Researching their AI strategies can help you decide if their stocks are worth a closer look.
Invest in the companies that has ability to impact the biggest trend.
Politics
Politics plays a significant role in shaping the success of companies, particularly across international markets. In certain industries, like cloud services, there are strong players in the U.S., such as Amazon AWS, Microsoft Azure, and Google Cloud. However, political boundaries can create insurmountable barriers. A striking example is China, where nearly every successful U.S. business has a local counterpart. U.S. companies often struggle or fail in the Chinese market — Google, Microsoft’s search/LinkedIn, and AWS all face this reality. These limitations are driven by politics and are unlikely to change.
As investors, we can look for similar opportunities within these boundaries. For instance, Alibaba dominates e-commerce in China, Baidu leads in search, and KC is a growing player in cloud services. I chose KC not only because it’s a cloud provider but also because of its connection to Jun Lei, the legendary entrepreneur behind Xiaomi.
Politics also influence sectors like cryptocurrency. For example, Trump’s election win boosted confidence in Bitcoin. While I’m skeptical about cryptocurrency’s long-term future, it presents opportunities — my picks, Square and Coinbase, reflect this. Similarly, Tesla has benefited from political and market dynamics, making it a strong short-term play.
Invest in the opportunities that benefited from politics / policy.
Conclusion
Several factors influence my stock picks, but the four key elements outlined above have the most significant impact:
- Industry
- Benchmark
- Trend
- Politics
I can’t say how well this approach will hold up or how long it will remain effective, but I believe the most important thing is:
Develop your own valuation system to assess companies you can logically understand. Once you have a framework, stick to it and continuously refine it over time.
Last thing to mention, I’m leading a team to build investment tracking with Fina, connecting investment brokers like Fidelity, Schwab to build a full picture of your investment, hope it helps.
