Hello, John Hutchinson here. I’m filling in for Emily Norris this week with a special edition of the Weekly Income Report. We are going to look at something I call the “Inheritance Portfolio.”
Before we do, here are all of the closed trades from the week of Jan. 27-31:
We generated nearly $1,000 with Income Masters closeouts, and while 5K Challenge members took a large loss on Nvidia (NVDA) last week, they are still well ahead for the year.
But, today, we’re focusing on the 3-Stock Strategy.
This year, I asked my dad to begin trading 3-Stock Strategy in a portfolio for me. I’m calling it the “Inheritance Portfolio.”
The importance of following the execution here is that it shows you can be flexible in your approach to the 3-Stock Strategy and that you don’t have to perfectly time your trades.
Performance for the month by stock, depending upon exit date:
Depending upon your approach with the 3-Stock Strategy, either equal shares or equal capital, members had a net loss of -3.4% for the month (equal capital) or a gain of 5.2% (equal shares).
The Inheritance Portfolio as run by Dad followed almost none of my instructions:
- He didn’t enter the trade on Jan. 6
- He didn’t enter at market open, even on Jan. 7
- He didn’t use a set capital amount to start
- He used equal shares, at 100 shares per stock (so I can sell calls, he said)
And we wound up +$605 on the month, a 5.2% gain.
Notes on stocks:
Lending Club (LC) missed earnings for the first time in 16 quarters, reported lower loan originations (decreased demand) and higher loan loss provisions (defaults) on Jan. 28, which sent the stock down nearly 20% in one day. This despite recovering from a -14% trough in mid-January.
Grid Dynamics (GDYN) never regained momentum in January. The stock didn’t suffer deep losses early month as LC and PLTR did, but ran into resistance and couldn’t break through as small caps underperformed large/mega caps.
Palantir (PLTR) withstood a double dose of negative news in the AI sector. First, Nvidia’s CEO said that quantum computing was 15 to 30 years away. Then came the DeepSeek announcement touting cheaper AI (don’t believe this until it’s truly proven).
Despite being down nearly -17% at one point, PLTR rebounded to new highs and an overall gain for the month.
I will probably regret closing PLTR ahead of earnings on Feb. 3, but frankly, with a gain in hand, I could not justify the risk of holding.
We’ll release our new stocks for February this week and hopefully be able to be more aggressive this month. With two of our stocks during January falling more than 10%, there was no justification to close and force ourselves to take a substantial loss. Instead, we waited out the month and our three stocks rebounded.
While LC still wound up a significant loss, PLTR and GDYN did not, and that helped to limit the loss for the month.
The biggest takeaway is to be willing to be flexible in how you approach any trading service. We’re required to provide the same details, recommendations or instructions to all members at the same time. You are not, however, required to follow them ☺.
**Late breaking news that Trump administration enacted tariffs this weekend will delay our February 3-Stock selection to allow us time to determine Wall Street’s reaction and money flows.
And Emily will be back next week with your usual Weekly Income Report.
