Trade Alert: Shakespeare Would Tell Us Us To Do A Portfolio Cleanup

“For I must tell you friendly in your ear,
Sell when you can; you are not for all markets.
Cry the man mercy, love him, take his offer…
…I pray you, do not fall in love with me…
…And be not proud. Though all the world could see,
None could be so abused in sight as he.”— Shakespeare: As You Like It, Act 3, Scene 5

Ms. McAdams, God rest her souls, made me study and memorize some passages from Shakespeare plays. And when this is a good one for a hedge fund manager to ponder, eh?

Anyway many of our biggest and longest-held positions keep on rallying led by the largest tech stocks including our Forever Positions like Google (GOOG), Meta (META), NVIDIA (NVDA), and Apple (AAPL). We’ve also had good gains in many of our other picks like Uber (UBER), Netflix (NFLX), Snowflake (SNOW), Cloudflare (NET), and others. As the stock prices of our longs go higher the size of our positions grow in tandem and as we have been doing buying in various names over the last few months, we have more positions on the sheets that we probably should have. As such, from time to time we have to rebalance and clean up the portfolio to make sure that we have our money in the right places.

Accordingly, we have forced ourselves to go through the portfolio and reduce the number of names we own. Thusly, we have made the hard decisions to sell the following long positions from the portfolio: T-Mobile (TMUS), Blade Air Mobility (BLDE), Snowflake (SNOW), Pfizer (PFE) common positions, and our Alibaba (BABA) call options.

These trades are simply a factor of portfolio management. We have limited capital (and limited brain capacity too of course!) and we must place our capital (and brain cycles) in the investments that:

1) have the best long-term risk/reward setup;

2) and that we have the most conviction in.

We still are still pretty darn bullish on most of these stocks and selling them is not an easy decision. The fundamentals for these companies are still largely intact and we would not be opposed to revisiting these stocks at some point in the future. But with the markets and many of our stocks at or near all-time highs, now is a good time to do some cleanup. As Cramer taught me when I used to sit down with him annually to review my first hedge fund’s performance and strategies and as Shakespeare taught me in high school — sell when you can, not when you have to.

On the other hand, we removed our Tesla (TSLA) hedges entirely today (in the hedge fund) and even bought a little more TSLA common (in both our personal accounts as well as in the hedge fund…by the way, a detailed update on Tesla is forthcoming).

Intel’s report was pretty good but their guidance wasn’t great and the stock is down after hours. I’m not planning on adding to it right now as we loaded up on this stock back when it was in its $20s and are not in a rush to buy more just now.

It’s noteworthy that Gelsinger did say that Intel should growth both revenues and earnings sequentially and year-over-year every quarter this year as they transition into their new models.

It’s also good to remember that Intel is rolling out some AI-based PCs in coming months and people like even Bryce are waiting until those come out before getting a new one. There could be quite a bit of pent up demand that is making the near-term growth of CPUs look smaller than it will in nine or twelve months when those AI-based PCs have hit the market place. In fact, nobody’s saying this, but AI-based PCs could actually spike demand for them over the next two years.

That’s it for now folks. Keep on keeping on.

“Simplicity is the ultimate sophistication.” – Leonardo DaVinci