Trade Alert: Taking A Little Off The Table
We are doing some trimming and hedging today as this market feels pretty frothy and this might even be a blow-off top right here (although that is very hard to predict) with so many major moves in stocks this week.
As we said in this week’s Live Q&A Chat, we are not bearish, but we are cautious right now and want to be disciplined in raising a little cash when markets are through the roof like they are right now.
We sold about half of our Intuitive Machines (LUNR) for roughly double the price we initially paid after only one month of owning the stock (here’s the Trade Alert from January 10th). Intuitive Machines’ lunar lander is scheduled to launch on a SpaceX Falcon 9 rocket next Wednesday (2/14/24), and this big run-up in the stock has likely been in anticipation of the launch. Even if all goes well next week, it could be a sell-the-news reaction and we want to take some off the table.
We also trimmed a little Cloudflare (NET) as it is up over 20% today after reporting earnings last night that beat expectations. Cloudflare is a great company but the valuation is stretched with the company trading at over 20x 2024 sales estimates right now. The cloud/SaaS stocks seem pretty darn frothy to us right now, and Cloudflare is up about 83% since we sent out the Trade Alert for it last September, so now is probably not a bad time to trim a little.
We also trimmed some of our iShares Bitcoin ETF (IBIT) and we added hedges via puts on some of the indices like iShares Semiconductor ETF (SOXX) and Global X Cloud Computing ETF (CLOU).
Again, just playing a little defense here.
