Mean reversion · daily rule · Big tech
Mayer Multiple on Tesla
What the play says
TSLA with the play, last two years
Shading shows the play's call from the close that triggered it.
Growth of $10,000 since 2011
Log scale. After trading costs, with T-bill interest while out.
The record
The play against buying and holding TSLA over exactly the same dates, after costs.
| Play, since 2011 | Hold, since 2011 | Play, 5 yrs | Hold, 5 yrs | |
|---|---|---|---|---|
| Annual return | +45.8% | +42.0% | +6.8% | +6.8% |
| Total return | +34,044% | +22,477% | +39% | +39% |
| Worst drawdown | −73.6% | −73.6% | −73.6% | −73.6% |
| Volatility | 55.7% | 56.7% | 59.9% | 59.9% |
| Sharpe ratio | 0.93 | 0.87 | 0.35 | 0.35 |
| Time invested | 98% | 100% | ||
| Switches per year | 1.9 | 0 |
Every call, graded
Right on 27 of 30 closed calls (90%). In calls averaged +65.0%; out calls saw TSLA move −2.7% on average.
| Called | Call | Price | Until | TSLA moved | Result |
|---|---|---|---|---|---|
| Jan 11, 2021 | IN | $270.40 | now | +38.8% | open |
| Jan 8, 2021 | OUT | $293.34 | Jan 11, 2021 | −7.8% | ✓ right |
| Sep 3, 2020 | IN | $135.67 | Jan 8, 2021 | +116.2% | ✓ right |
| Aug 20, 2020 | OUT | $133.46 | Sep 3, 2020 | +1.7% | ✕ wrong |
| Aug 19, 2020 | IN | $125.23 | Aug 20, 2020 | +6.6% | ✓ right |
| Aug 18, 2020 | OUT | $125.81 | Aug 19, 2020 | −0.5% | ✓ right |
| Jul 23, 2020 | IN | $100.87 | Aug 18, 2020 | +24.7% | ✓ right |
| Jul 20, 2020 | OUT | $109.53 | Jul 23, 2020 | −7.9% | ✓ right |
| Jul 16, 2020 | IN | $100.04 | Jul 20, 2020 | +9.5% | ✓ right |
| Jul 10, 2020 | OUT | $102.98 | Jul 16, 2020 | −2.8% | ✓ right |
| Feb 25, 2020 | IN | $53.33 | Jul 10, 2020 | +93.1% | ✓ right |
| Feb 3, 2020 | OUT | $52.00 | Feb 25, 2020 | +2.6% | ✕ wrong |
An in call is right when the price rose before the next call; an out call is right when it fell. The latest 12 of 31 calls shown.
How the play works
- In while the close is less than 2.4 times its 200-day average.
- Out when it reaches 2.4 or more.
Mayer used it to decide when to keep buying, not when to sell. Selling above 2.4 is Be The Puck's reading.
On ordinary stocks a price 2.4 times the 200-day is rare, so this is close to buy and hold.
The case against
Valeriy Zakamulin tested moving-average timing on up to 155 years of U.S. stock data and found no statistically significant edge in the second half of that record. The rules earned their keep in a few severe bear markets and lagged buy and hold for long stretches in between.