Tao Economics

Navigating Economics Cycles for Preservation and Survival

Dynamic Trailing Stop Losses Using Google Sheets

In the last 25 years of my investing journey, I have come to the conclusion on the most important thing to learn about investing.

It came from Warren Buffet.

“The first rule of an investment is don't lose money.”

Your first and foremost goal when buying stocks is to avoid catastrophic losses. No matter what stock guru you follow, no matter how much research you put into studying your picks, the simple fact of the matter is YOU WILL HAVE LOSSES.

If anyone tells you otherwise, run for the hills.

What matters is, are they catastrophic losses? Or are they small losses while you are able to let your winners run?

When using proper risk management for your portfolio it is possible to be up significantly with only a 40% win rate.

In short, it is a more important skill to learn how to manage a portfolio than to be a good stock picker.

The first step is to make sure you are using proper position sizing. Most of us instinctively know this to be true. If you put half of all your money into a biotech stock with no earnings you are looking for a bad time. You might as well go to a casino. At least Vegas may comp your room.

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We can use a stock's beta to determine how much of our investing capital we should risk.

A high beta stock is more volatile. Think of higher risk tech, biotech and mining companies. In this case we would only want to risk 1% of our total investing capital. However, with a blue chip stock that has consistent earnings, dividend payments and loyal customers maybe we can risk as much as 6%. These safer stocks will have a much lower beta. Then we have stocks that are somewhere in the middle. Most companies would likely fall in this range and we should invest no more than 3% of our capital.

Great! Now if one of these stocks gets cut in half from some crazy event it will only impact a small portion of our total investing capital.

Congratulations! Understanding the importance of using position sizes alone can prevent you from ruining your life and all that you have worked hard for!

Prevent yourself from these moments! enter image description here

Lets move to stop losses.

Years ago, I kept reading about how important and great stop losses are for protecting yourself against very large losses.

If you are familiar or have been a subscriber to any newsletters from Agora Financial, Stansberry Research, Paradigm Press Group, Manward Press, Curzio Research, or any other major financial publishing newsletter, then chances are you have already heard about stop losses. If so, the below information may be a good re-cap for you. Otherwise, feel free to get started using the Dynamic Trailing Stop Loss Tacker here >>

The idea of using a stop loss goes like this… If you have a stock you bought for $10, and it drops down to $5 (50%) you now need the stock to move up 100% to get back to that $10 level just to break even.

Your mind will tell you to wait and pray just to avoid looking at the loss. But, if we take the emotion out and have a stop loss which tells us to sell if the stock closes at or below 25% then we can avoid all that pain!

What's the dynamic part you say? Let's say you bought that stock for $10 and it moved up to $15. Congrats you have a winner. No stop loss has been triggered. Then all of a sudden, things are not looking as rosy as they were and the stock starts moving down. We have a dynamic stop less set for 25% and it will trigger if the stock is down from its current highs. Well, we hit that stop and we sell the stock for $11.25, giving us a profit of $1.25 a share. We notice the stock keeps going down and down and not only do we avoid a loss, but we keep a gain.

The IRS thanks you.

Great, I'm sold. There is just one big problem. Your broker allows you to enter stops, however this is like showing your hand to everyone while playing poker.

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Indeed, one of my good friends who worked for a stock broker damn near panicked when I told him I use stop losses. He thought I was entering them into my broker account. He stated they use that information against you and will push you out of your shares just to make a profit.

That left me hunting down for a stop loss program I could use that was not tied to my broker account. I did find a cool app that did the trick, and I used it for a while. But then they stopped updating the app and it eventually became unusable. The other best option I had found cost thousands of dollars.

I remembered that google sheets had a stock function that could pull in stock ticker data. I dug in and got to work. And indeed I was able to make a great stop loss program with google sheets! I have now been using google sheets to track my stop losses for years saving me lots of grief and pain.

Click to get the Stop Loss Tacker here >>

Below is what the stop loss google sheet looks like.

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I want you to have access to the stop loss program right away so you can confidently invest in the stock market.

Why the stock market?

We are in a massive and final wave of what the legendary Martin Armstrong calls a "Public versus Private wave".

What does that mean? There are times when confidence leans toward private markets and private assets. Meaning non-government. And there are times when confidence leans toward the government.

We are in a private wave which will come to an end in 2032. Everyone from large global institutions, from billionaires and millionaires are looking to park money just for safety. Where is that safety?

The liquidity and history of the U.S stock market is providing that safety. It may seem hard to believe and I am not suggesting investing during this time period will be easy. But with timing and risk management we can set ourselves up to be hugely successful.

U.S Treasury bonds have come off their lowest rates in their history. During the pandemic we had a housing and refinance boom due to the low rates. If you locked yourself into a fixed 30 year, congratulations! We will never see these rates again.

Confidence in government has cratered. Corruption and authoritarianism is here. Governments become more authoritarian when they lose relevance and will do anything to retain power.

Do you feel safe parking your money in 10 to 30 year U.S treasuries knowing it's trillion dollar deficits year after year with no intention of paying them back? Or at least the intention will be with severely devalued dollars.

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Capital will continue to seek out private assets. Private assets will include the stock market, precious metals, real estate, and collectibles.

We will continue to see these assets rise in value, but not in a straight predictable line.

If the powers that be succeed in their push to WW3. Capital will initially flow to the U.S for safety just as it did during WW2. These international capital flows will also help support stocks such as in the Dow Jones Industrial Average.

We can use any pull back in private assets as an entry position. For stocks we can use our position sizing and stop losses for additional protection.

Do not wait, start protecting your assets now >>

What about just being in cash?

Cash is important for an emergency and to be able to take part in opportunities that come up.

But if you know the governments are moving to CBDC's where they can track all of your purchases, collect taxes from just paying the babysitter and prevent you from buying and giving your money from things or entities they do not approve of, does that give you confidence in moving to cash? I didn't even mention the recent regional bank failures and the persistent inflation brought on by covid policies and government spending.

Luckily, we still have time before the CBDC's arrive. We will not likely see that move until after the 2024 election as the elite cannot afford something major to upend their power.

Again, capital is moving to private assets in this wave and we can position ourselves with confidence. While everyone else will be confused. We can act with confidence.

It is going to be very tricky navigating the road ahead, we are going to need all the tools we can to protect ourselves from ourselves!

You can have instant access to the Dynamic Trailing Stop Loss Tacker. Just click here.