Latest Positions: The Other Longs, The Short Hedges, Cryptos

Here is a Part 5 of 5 of the list my latest personal portfolio positions and most of the hedge fund positions with updated commentary and ratings for each position. Let’s do this week’s Live Q&A Chat at 1pm ET tomorrow (Wednesday). Come directly to the TWC Chat Room or just email us your question to support@tradingwithcody.com (by request, video chat will return next  week).

I don’t like the way these crappy penny stocks are continuing to sky rocket. I don’t like all the SPAC frenzy, even as I am hard at work on another Space SPAC name. Please be selective with your trades, if you’re trading out there in this Bubble-Blowing Bull Market Blow Off Top™ phase right now. I’m also letting go of SPLK.

Longs –

• • SPLK Splunk (6) – Bad quarter from SPLK last quarter as the company transitions to a new business model which will probably be great for the company long-term as the new model locks in recurring revenue streams. That said, this is a stock that’s trading at 10x next year’s sales estimates and isn’t profitable and probably won’t be next year. If I came across this stock afresh right now, in this Bubble-Blowing Bull Market Blow Off Top™ phase, I’d probably not like the set up here. And I want to continue to be disciplined about what we have in the portfolio and I don’t mind culling a name or two right now here. So SPLK, is out. Consider this a Trade Alert that I am selling my SPLK, locking in the profits we have there. The stock is up about 50% since we bought it a year and a half ago, which normally would be a big winner for people. In this Bubble-Blowing Bull Market Blow Off Top™ phase right now, it’s just average, which also underscores why I’m so concerned about the sustainability of the current valuations out there in the market.
  • ROKU (6+) – Prior Latest Positions, I wrote: “Relative to other stocks, this company trading at 9x next year’s sales estimates isn’t too outrageous.” Well, it’s now at 20x next year’s sales estimates as the stock has doubled again. Up more than triple the price we bought it at, the stock is on a tear, but the valuation is way stretched now. Of course, the whole reason we own this name is because as I put it last time also: “The fact that Roku can sort of become a bundler of the unbundled streaming networks makes it a good long-term Revolution Investment holding.”
  • QCOM (7) – When I added Qualcomm to the portfolio back in January 2019, I wrote this: “I bought some QCOM common and some QCOM call options with strikes ranging from $55 through $60 and dated out from April through next January. Stock has been crushed, shortsellers proclaiming how it could drop in half, lots of negativity around this name. Meanwhile, the dividend is nearly 5% and Qualcomm will be one of the best 5G plays in the world regardless of how their court cases play out.” Let’s update with changes in bold as usual. I own some QCOM common and am holding mostly steady here with the stock at $145. Stock has been on fire, longs proclaiming how it could double again, lots of excitement around this name. Meanwhile, the dividend is a not very helpful 1.7% and Qualcomm will be one of the best 5G plays in the world especially since they worked out most of their big court cases.
  • MP (6+) – Since we bought this stock a few weeks ago, the company reported a strong earnings report that included: “Revenue Grew 52% Year-Over-Year to $41.0 Million. Net Income Increased 4.2x Year-Over-Year to $14.6 Million. Adjusted EBITDA Grew 159% Year-Over-Year to $11.6 million.” Those numbers are impressive as the company ramps back up mining operations and is proving it can do so profitably. Long-term this company is uniquely positioned to benefit from geopolitical trends in addition to being in front of Technology Revolutions like batteries, EV, solar, etc. That said, I get uncomfortable with stocks that go up 300% in the few weeks after we just bought them and I don’t suggest loading the boat up in this stock at this time.
  • JMIA Jumia (6+) – Can I get a woo woo and a hoo hoo. This leading ecommerce company in Africa has gone up 200%+ since we bought it [checks calendar, doubles checks] less than a month ago. This is not a normal kind of move. I think it’s good to take some profits on this name while the chart is vertical but I plan on holding most of the shares steady for now.

Shorts –

• Primary short portfolio
  • QQQ Nasdaq 100 ETF (7) – I’ve got some index shorts and puts as hedges to our long exposure.
  • SMH Semiconductor ETF (7) – I’ve got some index shorts and puts as hedges to our long exposure.
  • IWM Small Cap ETF (7) – I’ve got some index shorts and puts as hedges to our long exposure.
  • SPY Small Cap ETF (7) – I’ve got some index shorts and puts as hedges to our long exposure.
  • EWU and EWUS British ETFs (7) – I’ve got some index shorts and puts as hedges to our long exposure.
  • Tiny short hedges, rated about a (7) – in ENPH, BLNK, VLDR, GLUU, and others. Shortselling has been painful and hedging hasn’t been helpful for the last few months. That will change. As always, I might cover these at any time and I’m not expecting to make much money on these shorts. They’re just hedges for the hedge fund and I’m not sure any of these are no-brainer shorts. Please don’t just go around blindly shorting these for your personal portfolio.

Cryptocurrencies/tokens –

• • Bitcoin (7) – Prior Latest Positions, I wrote: “Bitcoin’s looking like it could break out in the next few weeks, both from a fundamental perspective (US and other developed countries’ governments are printing money) and from a technical analysis perspective (it’s one of the only assets that hasn’t gone parabolic but has built a nice base here).” Well, since I wrote that, Bitcoin has gone up 150% and is parabolic. I still think it’s great long-term, but sheesh, it could use a pullback too.
    
  • Stellar Lumens (6) – I think it’s best not to group all cryptos together and that over time, each will trade on its merits and perceived/accepted values.
  • Ethereum (6) – I think it’s best not to group all cryptos together and that over time, each will trade on its merits and perceived/accepted values.
  • XRP (6) – I think it’s best not to group all cryptos together and that over time, each will trade on its merits and perceived/accepted values. Ripple just got sued by the SEC today. I’d steer clear of this one, but I’m holding what little XRP I have for now.

Disclosure: At the time of publication, the firm in which Mr. Willard is a partner and/or Mr. Willard had positions in some of the positions mentioned above although positions can change at any time and without notice.

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 way to go about investing and trading. 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.