2024 Trading Challenge Recap

I had previously participated in a stock market challenge for another finance class at the?Howard University School of Business. For that challenge, I experimented with the technique of short-selling stocks. My original strategy for this second time in the trading challenge was to get more experience with short-shelling. One thing that I needed to remember was that it was time-consuming. It requires checking various websites and keeping current on potential companies whose stock values were expected to drop. Many things are going on in my personal life, and I could not afford the time to follow the short-selling strategy. However, I still wanted to determine how to get a significant positive return on my portfolio. I was thinking of all the ways that could happen in such a short time frame because the challenge is only for a few months.

I decided to look at investments in the technology industry, which I am more familiar with than other industries. The top tech companies were suitable investments for a long-term strategy. They would not produce significant positive returns by the end of the trading challenge. On the other hand, I knew AI was a big trending topic in the news both in and outside the tech industry.

I also knew that the chips used to train AI models were graphics processor units (GPUs) through the chip's parallel processing architecture, which were far faster than other chips. I then remembered hearing from somewhere that?NVIDIA, one of the leading GPU producers, benefited tremendously from the rise of artificial intelligence (AI). This information made sense because as AI solutions and applications continue to grow, they are all powered by GPUs. I did more research into this and was curious about another chip manufacturer,?Micron Technology, who, through the Biden-Harris's CHIPS Act, was making a multi-billion dollar investment in a new chip plant in an area a little north of Syracuse, NY. (White House) It turned out that their chips were also in hot demand for AI.

I decided to invest significantly in these two companies for my portfolio. As shown in my portfolio's transaction history, I set out to make two significant investments to make the majority of my investment portfolio. I did test-making investments in Microsoft, Alphabet, and Intel. Still, after a short time, I did not like that their growth was not significant enough for me to hold onto them. On the other hand, I saw substantial returns with Micron and Nvidia, so I decided to invest more money in each of them.

This article in?The Economist?shows precisely why I wanted to invest in stocks like Nvidia and Micron to gain some significant return in this short time frame of this stock challenge: "Most analysts expect that Nvidia, which controls more than 95% of the market for specialist ai chips, will continue to grow at a blistering pace for the foreseeable future." (Economist)??

Here is the summary of my portfolio at the end of the challenge.

• Total Portfolio Value - $556,117.86
• Cash Balance - $279,722.65
• Loan Balance - $0.00
• Restricted Funds - $0.00
• Total Market Value of All Positions - $276,395.21
• Total Trades Made - 8

Bibliography

“Why Do Nvidia’s Chips Dominate the AI Market?” The Economist, 27 Feb. 2024, www.economist.com/the-economist-explains/2024/02/27/why-do-nvidias-chips-dominate-the-ai-market.

House, The White. “Statement by the President on Micron Chips Announcement in New York.” The White House, 4 Oct. 2022, www.whitehouse.gov/briefing-room/statements-releases/2022/10/04/statement-by-the-president-on-micron-chips-announcement-in-new-york/. Accessed 14 Apr. 2024.

Photo by Adeolu Eletu (https://unsplash.com/@adeolueletu) at Unsplash .