The rules
At the close of each month's first trading day, sell every holding at the next open. At that next day's close, rank the ten stocks by their return over the last 126 trading days, about six months, and buy the best three at the following open, 33% of the account each, skipping any whose return is not above zero. Money not in a stock stays in cash.
- Universe
- The ten largest chip companies listed in the US by market value at the close of December 30, 2016: INTC, TSM, QCOM, TXN, AVGO, NVDA, ASML, AMAT, NXPI, MU
- Bars
- daily
- Position size
- 33% of equity in each of up to three stocks
- Rebalance
- Monthly
Results
| Measure | Orbital test | SPY, same days |
|---|---|---|
| Window | Nov 21, 2016 to Oct 30, 2026 | Nov 21, 2016 to Oct 30, 2026 |
| Total return | +2531.61% | +302.23% |
| CAGR | +38.96% | +15.03% |
| Sharpe | 0.96 | 0.63 |
| Discounted Sharpe | 0.49 | — |
| Max drawdown | −40.0% | −33.7% |
| Win rate | 59.9% | — |
| Profit factor | 2.34 | — |
| Trades | 324 | — |
Hypothetical: a backtest with modeled costs, not traded with real money.
Hypothetical growth of $10,000
T03 2016 chip leaders, monthly top three · +2531.6% vs SPY +302.2%
Rebuild it in Orbital
Paste this into Orbital Chat. The Strategy Developer builds the workflow and asks before it runs any backtest.
Trade INTC, TSM, QCOM, TXN, AVGO, NVDA, ASML, AMAT, NXPI and MU on daily bars, built as a program. On the first trading day of each month, sell every holding. On the next trading day, score each stock by its return over the last 126 trading days and buy those scoring above zero, 33% of equity each, keeping the three highest scores with at most three positions. Backtest from November 21, 2016 to October 30, 2026 with $100,000.
Is it real?
- Strategies tested together
- 16
- Beta to SPY
- 1.19
- Alpha vs SPY
- +22.2% a year
- Costs paid
- $73,493, 3% of the gain before costs
- Data
- Daily bars, 2,499 sessions
- Fills
- Next open at market, sized at the fill
Read this before you trust it
The stocks were picked without hindsight of what came after 2016: the ten largest US-listed chip designers, makers and equipment makers by market value at the end of 2016, from companiesmarketcap.com's year-end values. Choosing chips as a theme in 2026 still carries hindsight, since chip stocks had an exceptional decade. The ranking date falls six weeks after the test begins, and all ten traded through the whole test. These rules were fixed on November 8, 2026, before any of them was run, and each is published whatever it showed. Each is a textbook setting, not tuned to these stocks.