Current Update for Full Year Stock Hold Fund (Start Date: Jan 3,2019)
Overall Gains –$13,813.66 Overall Returns -1.38%
First off, Apple (APPL) seemed to me a rare no-brainer situation. The company’s stock price plummeted to monthly lows of around the $140 range from a peak of $230. Hence on Jan 3, I was thrilled to purchase 4,506 shares at a price of $152.59. Already, Apple (APPL) is up 11.41% and giving me a overall gain of +78,641.33 and takes up 35% of my total holdings.
Another company I was excited to add to the portfolio was Tilray (TLRY). As a small cannabis company with a current market-cap of $7.12B and expected quarterly revenue hovering around $13 million, I truly believe this to be one of the most overvalued stocks I’ve ever seen. Hence, I took a short position of 6,047 shares at price of $81.51. Not only is this stock overvalued, but I also will note recreational purchasing of cannabis or marijuana is still illegal at a federal level. Shortly after taking a short position, the stock jumped above $85 giving it a similar market cap to retail behemoth Under Armour (UA) which posted a recent Q4 quarterly revenue of $1.390B on December 31, 2018. This comparison just highlights the absurdity associated with Tilray’s (TLRY) current stock price. I don’t think the stock will completely collapse, in the future there is money to be made in this sector, but I can’t see Tilray (TLRY) giving me a loss for the year on my shorts. For more on this and the cannabis sector, please read: https://www.barrons.com/articles/why-you-should-take-a-pass-on-u-s-marijuana-stocks-51550285414
My third pick and second short position , Snapchat (SNAP), has bubbled me recently and I’m currently looking at -46.20% overall returns and -$115,792 overall gains. Combine this big jump in price with Snapchat (SNAP) making up a considerable 17% of my total holdings, the stock has single handedly pushed my overall returns into the red. Luckily, the company’s fundamentals and structure is nothing short of abysmal. Dwindling user growth, encroaching industry rivals, young user base with little advertising potential value, executive flight, class-action lawsuits and failed product launches are attribute of Snapchat (SNAP) over the past two years. Another issue that concerns me, is the company can increase outstanding shares on the first day of each year beginning 1/1/18 until 2027. With all these current problems at hand and especially the recent lawsuits, I just don’t see it being a positive year for Snapchat (SNAP). With that being said, placing shorts at a $6.25 price has me a little worried due to the already low price. This gives me very little room profit, but let’s see how the year plays out.
My fourth pick was Amazon (AMZN). I purchased 150 shares at a price of $1,663.58. Having hit the $2,000 mark in 2018, I think the company is the most innovative in today’s current market and CEO Jeff Bezos continues to strive for a portion of every retail dollar. In past month, the stock price has been stopped by a recent scandal, hence the current -3.34%, but I continue to have faith in the company, it’s business model and it’s exceptional leadership. Bar the possibility of a global downturn, I see 2019 being another positive year for Amazon (AMZN).
The fifth pick and third short is Tesla (TSLA) and an old friend CEO Elon Musk. The reason for the short, is the company’s upcoming debt payments late in the year. Already, the company seemingly barely survived a wild 2018, which saw the famous “funding secured tweet” and at one point was operating with only two weeks worth left of cash. As for the upcoming 2019, the company years ago issued convertible notes which are now due in March 2019 and have a conversion price of $359.87. When these convertible notes come to maturity and the stock isn’t trading at or above $359.87, Tesla (TSLA) could possibly be stuck with a $920 million cash payout. This should cause any trader to worry especially with the stock trading at a current $307.88 or $51.99 below the conversion rate.
The sixth pick was Exxon Mobil (XOM). I bought 1,503 shares at a price of $71.56. This choice or position, wasn’t a short or long stated position, rather I thought Exxon Mobil (XOM) at $71.56 was trading at below the value I perceived it to be due to the late 2018 oil price plunge. This proved correct as shares are already up 8.64% and oil prices has begun to recentely rally.
The final pick was Deutsche Bank (DB). I purchased 10,086 shares at a price of $8.58 and consider Deutsche Bank (DB) to be a risky value position. What I mean by this is that it’s the 15th largest bank in the world with $1.765T in assets and was founded in Berlin in the year 1870. Yet, the stock has been subject to multiple high-profile political and financial scandals in the past decade and has completely collapsed off it’s pre 2008 global financial peak of $150 per share. With Deutsche Bank’s (DB) already low evaluation and market cap of $18.276B, I figured the price has considerably more upside than downside. Also, with it’s established global network and small market cap, it poses a potential takeover opportunity. Positioning Deutsche Bank (DB) was more of a gamble than an educated pick, but the stock is only 4% of my portfolio holdings so it minimizes risk and is already up 2.45% so far in the year.