Investments Trade Log

[giskard]

The top is close. The number of investment conversations I have had with people that have never considered investing before has gone exponential.

Agree. Everyone I know who doesn't invest asked me about Gamestop. Next, people started asking me about Marijuana stocks and I dismissed it. Then I got curious and I looked at the big Canadian companies like ACB, TLRY and the like and they are all still trash. Bad growth numbers, bad earnings, bad cash flow. They all still suck, and they are too expensive and bad businesses.

Except interestingly I started looking at the US cannabis companies on the pinksheets and several of them have good revenue growth numbers, positive cash flow, good balance sheets, and not at insane valuations. I ended up buying some MSOS which is an ETF that is composed of the large multistate dispensary operators and growers. You can actually make the case they are kinda-sorta value stocks. If Schumer's legalization legislation goes anywhere and more states legalize (they will, if only to cover deficits) this thing has legs.

Anyway, that's my trade update bought MSOS at the top haha

[Lemur]

Microsoft Shares called away finally. I've been eyeing Bank stocks for a while now so here is my next move executed this morning:

Purchased 734 shares of Bank of America
Purchased 20 BAC LEAPS for $10.00 per contract: $25 strike, Exp: 01/21/22 (Breakeven is when underlying is $35 at expiration).
Selling monthly calls against this position to reduce cost basis (diagonal calendar spread).

Bank stocks are an undervalued sector at the moment....one of the few with reasonable PE ratios. I think banks will benefit greatly this year as PPP loan fees increase revenue, and general inflation may take hold as economy recovers from COIVD pandemic. Finally this move further diversifies me away from tech...I only have AMD and AAPL now as tech holdings. Edit: And Nokia of course...

[white belt]

URNM is up over $60 now. I bought in with 70 shares when it was at $29. I think there is even more upside for commodities in general and especially uranium given the push for green energy, so I’m going to hold on for now.

I have long commodity exposure as part of dipping my toes into Commodity Trend Following. I didn’t want to pay the DJP fees, so I made my own basket of the 3 largest producers each in energy, metals/mining, and agriculture, matched to the percentage that DJP allocates to the different sectors. I figure it should show a strong correlation to the underlying commodities without the complexity of trading futures. This will work until the trend changes and I’ll have to put on short positions with options, but I think we have some time until then.

[giskard]

URNM is up over $60 now. I bought in with 70 shares when it was at $29. I think there is even more upside for commodities in general and especially uranium given the push for green energy, so I’m going to hold on for now.

I have long commodity exposure as part of dipping my toes into Commodity Trend Following. I didn’t want to pay the DJP fees, so I made my own basket of the 3 largest producers each in energy, metals/mining, and agriculture, matched to the percentage that DJP allocates to the different sectors. I figure it should show a strong correlation to the underlying commodities without the complexity of trading futures. This will work until the trend changes and I’ll have to put on short positions with options, but I think we have some time until then.

Same, was watching uranium go yesterday and I feel like it's probably like a 3-5 year-ish hold at this point still. Will keep adding URNM and CCJ on the dips.

Also building a basket of commodity picks now. What did you pick for agriculture exposure? MOS? ADM?

I'm scaling into more US marijuana companies and out of GBTC at the moment in one account. Yes I'm selling a little bitcoin (kinda, does GBTC really count?) ...

[giskard]

Microsoft Shares called away finally. I've been eyeing Bank stocks for a while now so here is my next move executed this morning:

Purchased 734 shares of Bank of America
Purchased 20 BAC LEAPS for $10.00 per contract: $25 strike, Exp: 01/21/22 (Breakeven is when underlying is $35 at expiration).
Selling monthly calls against this position to reduce cost basis (diagonal calendar spread).

Bank stocks are an undervalued sector at the moment....one of the few with reasonable PE ratios. I think banks will benefit greatly this year as PPP loan fees increase revenue, and general inflation may take hold as economy recovers from COIVD pandemic. Finally this move further diversifies me away from tech...I only have AMD and AAPL now as tech holdings.

IMO bank stocks are deservedly cheap because rates are low and people are expecting the central banks to keep them low, I think they are a value trap personally. But vol is low in bank stocks so buying those LEAPs is probably a great gamble given the cost.

On the other hand Buffet's 13F for this quarter just revealed he sold even more of his bank stocks.

[white belt]

Also building a basket of commodity picks now. What did you pick for agriculture exposure? MOS? ADM?

After some research, I determined that DJP's breakdown by sector is roughly as follows, with my basket I allocated in parentheses:

Simplified DJP
36% Agriculture (ADM, TSN, BG)
25% Energy (XOM, RDS-B, CVX)
39% Metals and Mining (BHP, RIO, VALE)

For agriculture, I was relatively unsophisticated and just picked some of the largest producers by market value. I wanted exposure to livestock as well which is why I included TSN. I think in the next cycle I may get more sophisticated to get more exact correlations, but for my purposes I'm just using this as an 18% total portfolio allocation for CTF because I am implementing Chris Cole's Dragon Portfolio.

Edit: It looks like gold is going to continue this downtrend, so I will definitely be buying the dip over the coming weeks. I think the long term fundamentals to be bullish on gold couldn't be better.

[giskard]

After some research, I determined that DJP's breakdown by sector is roughly as follows, with my basket I allocated in parentheses:

Simplified DJP
36% Agriculture (ADM, TSN, BG)
25% Energy (XOM, RDS-B, CVX)
39% Metals and Mining (BHP, RIO, VALE)

Nice I like BG after looking at it more. Still need to do even more research.

Bought some more GTBIF (Green Thumb) today because why not.

[giskard]

Today the market really sold off deeply in the morning. I put some orders in to sell puts on various things like PLTR, APHA, etc but nothing filled and the market was already turning around.

I continue to be concerned about the long dated bond yields increasing and no hint of action from the fed. I'm considering de-risking a little bit just to have some optionality in case we keep going lower. For now most of contracts rolled off on expiration Friday and I just haven't put a lot more on yet other than selling a VALE put since it was down yesterday.

[Lemur]

Added to NOK and MAC positions...brave move but I'm down so much I wanted to reduce cost basis per share and I'm still long.

NOK - positive media news is starting to roll in with 5G deals and NOK named as one of the top 'ethical companies.'
MAC - This is interesting... https://finance.yahoo.com/news/mall-own ... 10427.html the same partners helped another real estate company file chapter 11 bankruptcy and rework its debt structure https://www.prnewswire.com/news-release ... 90970.html and that stock doubled as a result (NYSE: PEI). Maybe I'll get lucky here ...

In other news...banks all up today. My BAC LEAPs look nice. I have a monthly CC in March for $37. Should that price hit I'll sell the LEAPS at a good profit to close out short . BAC trading at $36.28.

[Lemur]

COSTCO is 15% off its 52-week high. Some signs of inflation this year...looking for more inflation-hedged positions. I'm thinking this might be my next entry.

Growing revenue and net income the past 5 years
5 Years now the stock just trends up...
ROA: 7.16%
ROE: 27.81%
Total Cash Per Share: 32.56 (representing ~10% of current stock price)
Pays Dividend
Cash Flow Positive with increasing Free Cash Flows since 2018
Current Ratio: 1.13
Charlie Munger likes the stock (but he probably got in way before I did).

Anyone have quick bearish reasons to not like this stock?

On the ground inflation FWIW, my energy drink habit was largely kicked when I could no longer get 2 for $3 deals at quick-stop places....and they used to be 99 cents at my Walmart but now are $1.53.

[Crusader]

When the whole Gamestop thing was happening, I kept thinking... why can't I short it when it's high, because there was no way it was going to keep being that high... and indeed, it fell from $350 to $50 in a week. I wish that I had a margin account to be able to short sell it myself at this point, but alas, I didn't. It seemed like a no brainer. Is there any reason why people didn't do that?

Btw, it seems to be happening again on a smaller scale:
https://www.theverge.com/2021/2/24/2229 ... s-gme-pump

[Lemur]

- Rolled out and up BAC CCs for credit
- Rolled out and up V CCs for credit
- Closed out CCs on WMT for profit
- MAC up another 7% this morning
- NOK is up to; monitoring as my $4.50 may be tested soon.

Today was a good day.

[Lucky C]

COSTCO ...
Anyone have quick bearish reasons to not like this stock?

1. Its price is going down
2. All insider selling, no insider buying
3. Just announced $16 min wage

[Lucky C]

Why not Kroger?

[Lemur]

I'll have to deep dive into it, but Kroger from a quick look has an ugly 5 year trend. At least COST is trending up long-term. I also am not too bearish about the $16 minimum wage; sounds like good publicity since likely the Senate will succeed in the $15 minimum wage at some point this year anyway...perhaps. Kroger can come out and say they were there before the gov't took action.

The insider selling is interesting though. Again, I'm not too bearish on that. Insider selling can happen for loads of reason - what is more bearish is the lack of buying though...

[Lucky C]

Historically you'd want to go after trends in the 3 month to 12 month range and avoid trends of about 5 years due to mean reversion. At least that's the case for indices / asset classes. SPY in early 2008 had a great 5-year trend and a poor 6-month trend, for example. Individual stocks seem to be harder to apply trend-following rules to, but the same general idea should apply. I would avoid COST due to the very strong multi-year trend possibly now being broken over the past few months.

KR doesn't have much of a trend at all but it looks pretty uncorrelated to the market, good for diversification. It looked like a better value that shouldn't sink much if the market tanks, but on the flip side it wouldn't go anywhere if growth continued to beat value stocks.

[Seppia]

I'm starting to look into PFE, any very good reason why I should not?

[giskard]

Why not Kroger?

Kroger has a big debt issue, unionized employees, and they have a bunch of bolt on grocery chains they acquired that are not fully integrated leading to extra overhead. Walmart is a much more efficient grocery operator imo.

[giskard]

Holy crap the 10 year yield today! I did not see the 10 yr hitting 1.5% this week... just wow.

Wonder what it will do tomorrow, next week, next month? Will they do YCC? This is going to keep crushing markets if it continues.

Trades: nothing but I will probably start nibbling at things soon depending on how Friday's close goes / Sunday's open. Expecting a lot of red.

[Lemur]

@Lucky C

That is a good point. The further we go back historically the more those trends don't matter too much.
Some people use technical analysis for this stuff like MACD lines.

Key I see is being forward-looking but this takes some diving into the financial statements, risk disclosures, and the like. I've done this before but never tried to value any business like KR or COST. Will have to read up more...

Or do the easier thing... see what the sentiment is through social media trends....

@giskard

Inflation? Because who has bonds to sell anymore...

Inflation erodes the purchasing power of a bond's future cash flows. Put simply, the higher the current rate of inflation and the higher the (expected) future rates of inflation, the higher the yields will rise across the yield curve, as investors will demand this higher yield to compensate for inflation risk.