Week 1 Recap: What a Way to Start
No one expects to release a financial experiment — especially one involving predicting stock market trends — in the same week as one of the largest global conflicts in recent history. That weighed heavily on the S&P 500's performance this week as investors assessed the conflict's broader impact.
While the week's results weren't good for most models, each day showed some glimmers of hope for recovery.
The two up days for the S&P 500 (March 2nd and March 4th) saw the biggest gains for the portfolios, yielding 2x and 3x the S&P 500's gains. Of course, the opposite effect happened during the S&P 500's down days, compounding the losses in each of the portfolios.
Week 1 Total Performance
| Dates | S&P 500 | Ensemble | Growth Eval | ML Model #1 | ML Model #2 |
|---|---|---|---|---|---|
| Week 1 (3/2 – 3/6) | -1.39% | -3.22% | -2.57% | -3.81% | -4.59% |
Daily Breakdown
| Date | S&P 500 | Ensemble | Growth Eval | ML Model #1 | ML Model #2 |
|---|---|---|---|---|---|
| 3/2 | +0.76% | +1.57% | +1.96% | +1.26% | +1.37% |
| 3/3 | -0.89% | -3.05% | -2.57% | -3.36% | -4.18% |
| 3/4 | +0.71% | +2.31% | +2.16% | +2.61% | +3.08% |
| 3/5 | -0.56% | -0.96% | -1.15% | -1.04% | -0.39% |
| 3/6 | -1.41% | -3.09% | -2.97% | -3.28% | -4.47% |
The portfolios were actually holding their own and trying to recover heading into Friday, but the support fell out in the final hour, compounding the losses for the week.
I decided to take a look at the fundamentals of some of the biggest losers across the portfolios to see what we could learn. I investigated SanDisk, Teradyne, and Applied Materials.
As you can see from the last column, all three stocks had large, arguably unsustainable run-ups over the last 6 months.
SanDisk benefited from its spin-off from Western Digital and the AI-driven NAND supply shortage, which sent prices soaring. Strong Q4 numbers and inclusion in the S&P 500 accelerated the rise to where it is today.
Biggest Losers
| Stock | Entry Price | 3/6 Close | Full Week Return | 6-Month Run-Up |
|---|---|---|---|---|
| SNDK | $618.65 | $527.33 | -14.76% | +1,262% |
| TER | $310.50 | $273.05 | -12.07% | +185% |
| AMAT | $368.79 | $324.74 | -11.94% | +151% |
Teradyne seems to be the most financially stable of the three stocks. The PE ratio is on the higher side, but it can be supported by strong Q1 numbers and the fact that AI chip testing now accounts for over 60% of their revenue.
Applied Materials is, to some extent, a victim of the current uncertainty surrounding tariffs. The future of tariff policy remains unclear, with most investors pricing in the worst for now, which has weighed on the stock over the last week.
One thing is for sure: the volatility will continue. While I'm hoping for an upswing in the markets — as the portfolios have demonstrated their ability to recover sharply on up days — I don't see that happening soon. Hopefully, this week's sell-off will settle things down for a few days as the markets look for direction.
Thanks for reading!