Know your alpha !

@TigerStars @Tiger_Earnings @TigerBrokers @Tiger_Earnings @TigerStars @Tiger_comments$Invesco QQQ(QQQ)$ $NVIDIA(NVDA)$  $SPDR S&P 500 ETF Trust(SPY)$  

First, it's important to define alpha (\alpha). In finance, alpha is a measure of an investment's performance on a risk-adjusted basis. It represents the "excess return" of a stock or portfolio relative to a benchmark index, like the S&P 500.

* A positive alpha means the investment has performed better than its benchmark.

* A negative alpha means the investment has underperformed its benchmark.

* An alpha of zero means the investment's return was adequate for the risk taken.

A precise calculation of alpha requires knowing the investment's beta (\beta), the risk-free rate, and the exact holding period, which are not provided. However, we can perform a strong comparative analysis by using the index ETFs within your own portfolio as the benchmarks. This is a very practical way to assess the performance of your stock picks.

My Portfolio's Benchmarks:

performance of major market index ETFs:

* SPDR S&P 500 ETF (SPY): +11.24%

* Invesco QQQ (Nasdaq-100): +17.60%

* iShares Russell 2000 (IWM): +12.51%

We will use the S&P 500 (SPY) as the primary benchmark for the broad market and the Nasdaq-100 (QQQ) as the benchmark for technology-focused stocks.

Analysis of Individual Stocks

Here is a breakdown of my holdings, categorized by their estimated alpha relative to these benchmarks.

Stocks with Strong Positive Alpha

These stocks have significantly outperformed both the S&P 500 and the Nasdaq-100, indicating excellent stock selection.

* NVIDIA (NVDA): +48.11%

* This is your top performer, generating massive alpha by outperforming the QQQ by over 30 percentage points.

* Taiwan Semiconductor (TSM): +37.16%

* Another huge winner, demonstrating very strong positive alpha against both benchmarks.

* Uber (UBER): +29.46%

* Exceptional performance, beating the S&P 500 by over 18 percentage points.

* Microsoft (MSFT): +25.75%

* As a mega-cap tech stock, it has impressively beaten both the S&P 500 and the tech-heavy Nasdaq-100.

* Meta Platforms (META): +18.52%

* Solid performance, generating positive alpha by slightly outperforming its direct benchmark, the QQQ.

Stocks with Mixed or Mildly Positive Alpha

These stocks have beaten the broader market (S&P 500) but may have lagged the tech-focused Nasdaq-100.

* Alphabet (GOOG): +16.43%

* Positive alpha vs. SPY (+11.24%).

* Negative alpha vs. QQQ (+17.60%).

* ASML Holding (ASML): +16.62%

* Positive alpha vs. SPY.

* Negative alpha vs. QQQ.

* Amazon (AMZN): +12.82%

* Slightly positive alpha vs. SPY.

* Negative alpha vs. QQQ.

* Tesla (TSLA): +10.69%

* Slightly negative alpha vs. SPY (+11.24%).

* Negative alpha vs. QQQ, its more common benchmark.

Stocks with Negative Alpha

These stocks have underperformed the S&P 500 benchmark, meaning they have dragged down the portfolio's overall performance relative to simply holding an index fund.

* Elevance Health (ELV): -1.66%

* Thermo Fisher (TMO): -0.74%

* Adobe (ADBE): -6.44%

* Merck (MRK): -7.35%

* Novo-Nordisk (NVO): -8.35%

* Alphabet (GOOGL): +8.23% (This holding is underperforming both SPY and QQQ)

* Salesforce (CRM): -9.90%

* Apple (AAPL): -10.04%

* UnitedHealth (UNH): -15.82%

* Alpha Metallurgical (AMR): -20.71%

By comparing my total portfolio return to the benchmarks:

* vs. S&P 500 (SPY at +11.24%): my portfolio has a positive alpha beaten the broader market by approximately 1.49%.

* vs. Nasdaq-100 (QQQ at +17.60%): my portfolio has a negative alpha. holdings are heavily weighted towards technology, but your overall return has not kept pace with the top 100 tech stocks in the Nasdaq.

Conclusion:

stock-picking strategy has generated positive alpha relative to the general market (S&P 500). This success is overwhelmingly driven by a few spectacular performers, most notably NVIDIA, Taiwan Semiconductor, Uber, and Microsoft. These big wins have more than compensated for the significant number of holdings that have underperformed the market. While the portfolio has lagged the exceptionally strong performance of the Nasdaq-100, outperforming the S&P 500 is a significant achievement.