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First Off, Don’t Panic PLUS Positions: (Energy, China Stock Reviews)

Cody Willard

Cody Willard

— 3 min read

Here is a Part 3 of 3 of the list my latest personal portfolio positions and most of the hedge fund positions with updated commentary and ratings for each position. We will do this week’s Live Q&A chat at 10am ET tomorrow (Friday) in the TWC Chat Room or just email us your question to support@tradingwithcody.com.

Stocks crashing today. I’m not sure we’re near a real bottom yet, but I do not think it’s a great time to sell or short at this moment at these crashed levels during a panicky sell-off. In fact, I’m doing some covering of shorts, at least partially, almost across the board into this afternoon’s bearish fall. Anecdotally, I have friends who trade stocks for a living who have never mentioned shorting a stock or buying puts to me until today. I have smart investor friends who are predicting more crashing and looking for 20-30% drops in the tech stock indices.

Look, slow down. Be cool. We have been positioned cautiously and defensively for months now and this is just part of that process of finding a bottom on the other side of the Great Bubble-Blowing Bull Market that just saw its many bubbles go “pop!” I’d rather buy than sell today. I am indeed nibbling on some FB and PYPL in the hedge fund today. If we’re positioned correctly, you can mostly sit tight rather than panic.

The ratings for each stock go from 1 to 10, 1 being “Get out of this position now!” and 10 being “Sell the farm, I’ve found a perfect investment.” The positions that are bolded are those that I consider to be “core” holdings and am unlikely to ever sell out of them entirely.

Longs –

The Energy/Materials Revolution –

    • SEDG Solar Edge (7+) – Solar stocks are on the other side of their own bubble, as the unwinding of these wacky valuations that were so rampant in market continues apace. Solar Edge is still the best solar stock out there and its valuation isn’t that crazy, trading at 25x next year’s earnings growing 40% topline this year and 25% topline next year. Can the company meet those high expectations? I think it might be a stretch in a tough economy. I’ve trimmed this name as noted at higher levels and I’d look to buy some shares back if the stock drops below $200.
    • MP MP Materials (6+) – MP is, like Intel, perfectly positioned for this Un-Globalization/Domestication Revolution that is in place for the next decade at least, I think. A couple weeks ago when MP was near $60 I’d noted in a chat when asked about it that: “MP is not cheap and is not Intel. I don’t know the management here well (and I don’t like the guy who brought the stock out as a SPAC) but I hold a small-ish position in this name. I would be a buyer again in the $30s.” The stock is now at $42 and that’s close to the $30s where I’d said I’d be likely to start nibbling on some of the shares I’d trimmed in this name. Consider this a Trade Alert that I’m nibbling a small tranche here in the hedge fund in this name today.

The China Middle Class Revolution –

    • JD JD.com (8) – JD’s cheap, a great company, but it’s based in China. That’s why we were able to buy some more a couple months ago when it really crashed on China-crackdown-on-tech headlines. That said, the risk of investing in a communist country is real and that’s why the stock has stayed cheap. It’s been a wild ride for all these Chinese stocks this year, even more so than it has been for US stocks. I’m not doing anything with my Chinese tech stock basket right now, as it is up big from the lows where we started building it but it’s now down big from its recent highs. Patience, for now on these names.
    • TCEHY Ten Cent (7) – JD’s cheap, a great company, but it’s based in China. That’s why we were able to buy some more a couple months ago when it really crashed on China-crackdown-on-tech headlines. That said, the risk of investing in a communist country is real and that’s why the stock has stayed cheap. It’s been a wild ride for all these Chinese stocks this year, even more so than it has been for US stocks. I’m not doing anything with my Chinese tech stock basket right now, as it is up big from the lows where we started building it but it’s now down big from its recent highs. Patience, for now on these names.
    • BABA Alibaba (8) – JD’s cheap, a great company, but it’s based in China. That’s why we were able to buy some more a couple months ago when it really crashed on China-crackdown-on-tech headlines. That said, the risk of investing in a communist country is real and that’s why the stock has stayed cheap. It’s been a wild ride for all these Chinese stocks this year, even more so than it has been for US stocks. I’m not doing anything with my Chinese tech stock basket right now, as it is up big from the lows where we started building it but it’s now down big from its recent highs. Patience, for now on these names.

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