What a wild ride this year has been. So many hedge funds and mutual funds and money managers have been destroyed in energy. Even those who avoided energy’s collapse have panicked at the bottoms and bought stocks at the tops. A slow down in China, a panicky mini-crash in global stock markets in late summer, many different “crises” and a relentless climb higher in many of our stocks and most of our largest positions has made this yet another wild year. And we still have 10% of 2015’s trading days left! So let’s not rest on our laurels, let’s not slow down, let’s keep it pushing.
Every few weeks I sit down and go through my entire portfolio and rank each position on a scale of 1 to 10 and then send it out to my TradingWithCody subscribers. It’s very important to look at your own positions in order from largest to smallest and to rank each asset, equity and position you own. Doing so will help you realize the opportunity costs of owning lower-rated positions and to help you sell your losers while riding your winners.
Here’s a list of my latest positions. I’ve broken the list into Longs and Shorts. And from there, I’ve broken down each list into refined categories in order from the largest positions within each category to the smallest. I also give each stock a current rating from 1 to 10, 1 being “Get out of this position now!” and 10 being “Sell the farm, I’ve found a perfect investment.”
So here’s the list:
- Forever assets and other permanent holdings –
- Media and other private investment/business holdings (9+ because betting on yourself and running a business is always a best bet)
- Real estate, including land and the ranch I live on in NM (8)
- Physical gold bullion & coins (7)
- Primary stock exposure portfolio
- Apple (8) – Will the Apple Watch be a big hit this Christmas? Does it even matter in a world where the iPhone is slowly but surely becoming ever more dominant and driving this stock?
- Google (7) – YouTube, Android and Google’s self-driving cars are still in their infancy. Google’s successfully become the dominant search company in mobile in addition to ruling desktop.
- Facebook (7) – I’ve long said that Facebook is underowned by professional money managers, hedge funders and mutual fund managers and while it’s certainly more popularly-owned now, it’s still not as widely owned as Google and Apple for example.
- Amazon (6) – Amazon’s been bashed and shorted by the professionals for years, but it seems even oldsters like Stanley Druckenmiller have finally come around to seeing Amazon’s retail dominance for what it is.
- Synaptics (8) – Synaptics is dominating the controller business for smartphones and is a possible target for a quickly consolidating seminconductor chip industry.
- F5 (8) – The cheapest way to invest in the growth of network security and a company that also could be a target for a Cisco or Dell.
- Sony (8) – Sony’s dominance as a TV show and movie library has it set up to be the biggest beneficiary of the streaming video wars. Meanwhile, Sony’s wearables and mini-video cameras are starting to challenge GoPro in the marketplace.
- Silicon Motion (8) – Silicon Motion is another potential target in the semiconductor space and is cheap, growing quickly and well-managed in the meantime.
- Netflix (7) – Talk about dominance. This company is changing the way billions of people watch TV.
- First Solar (7) – This might be just about the only energy company on the planet that’s been strong this year.
- Ambarella (7) – Ambarella’s going to report earnings next week which will give us a better idea of how well it’s been able to diversify away from GoPro. The stock is headed higher if the report shows the company is growing its drone, police and robotics businesses quickly.
- Axogen (8) – Strong growth, strong demand for new nerve reconstruction technologies throughout the world.
- Applied Materials (7) – Strong performance last quarter and this is yet another potential target for semiconductor industry consolidation. I expect that China’s about to start sniffing around the semiconductor suppliers like AMAT.
- FitBit (8) – I keep coming back to this when I analyze this company: The company’s growing enterprise business where companies themselves are paying for their employees to use FitBit fitness trackers to cut health-care costs is the one thing the market doesn’t quite grasp the strength of yet.
- Twitter (5) – I need a break from this name for a while. I’m likely going to be selling TWTR this week and will revisit it in the new year.
- GDX call options (6) – Not much time or value left in the few GDX call options we didn’t sell for nice profits earlier.
- Primary short portfolio
- Pandora (7) – Pandora’s not profitable and still trying to figure out how to become profitable while Spotify and Apple Music and Amazon and Google cut into its radio business with better products.
- GW Pharmaceuticals (8) – I don’t think there’s much if anything patent-able in GWPH’s drugs. The founder/Chairman and the CEO helped run a biotech company fifteen years ago that was also sketchy and is down 99% since then. And even if GWPH does secure approval for their drugs, I’m not sure they would ever justify their current nearly $2BB valuation.
- Valeant Pharmaceuticals (7) – Everytime I see Valeant try to assuage investor concerns, I grow more bearish on the stock.
- IBB Biotech ETF (8) – Our small put position on this sector hasn’t worked out. Letting it ride as a small hedge for now.
Remember: I wouldn’t rush into a full position all at once in any of these stocks or any other position you’ll ever buy. Patience and allowing the market and time to work to your advantage by buying in tranches is key. Maybe 1/3 or 1/5 of whatever you might consider to be a “full position” in any particular stock. And I wouldn’t ever have more than 5-15% of your portfolio in any one stock position at any given time. The younger you are and/or the higher the trajectory of your career income, the more concentrated and risk-taking you can be with weighting in your portfolio. But spread your purchases and your risk out over time and over a several positions no matter your age or risk-averse level.
Scaling into a position using an approach of buying 1/3 or 1/5 tranches over time is how I build my personal portfolio positions, but there’s no scientific answer for your question. Sometimes you have to pay up for the latest tranche but I try to be patient and wait for a temporary sell-off to add to the existing position.
** NOTE FOR NEW SUBSCRIBERS:
If you’re new to TradingWithCody or if you’ve been a subscriber for a while but haven’t acted on much of my strategies yet and/or if you haven’t been in the markets, but you’re sick of getting 0% on your CDs, Treasuries, savings, checking, etc while the markets have been continually hitting all-time highs this year, what should you do now?
Before you ever make any trade, step back and catch your breath before moving any money anywhere. Rank your positions and your whole portfolio and make sure you’re not about to make any emotional moves with your money.
If you haven’t yet read “Everything You Need to Know About Investing” then spend a couple hours doing so, please. It’s a quick read but chock-full of important ideas, concepts and strategies that amateurs and pros alike should understand.
Then, take a look at my own personal portfolio’s Latest Positions and slowly start to scale into some of the ones you like best and/or the ones I have rated highest right now. I’d look to start scaling into a few of the many stocks in the Latest Positions that are at all-time highs along with a couple that we’ve recently featured in our Trade Alerts that I’ve personally been scaling into.
You can find an archive of Trade Alerts here.