Portfolio Report (July 11)

Haven’t done a portfolio update in awhile so I figured I go ahead and update you all on my current positions and recent trades.  Of recent important news the DOW broke 27,000 for the first time ever and Jerome Powell, the Federal Reserve chairman, indicated that he may cut rates.  As for benchmark performance the S&P 500 is up about 20.6% YTD, while my holdings are up 19.13%. Rather than bemoan the fact of my slightly trailing performance, 1.47% isn’t much of a big fret, I actually feel quite comfortable due to my current positions and developing watchlist. 

For starters, I continue to have faith in Apple and it’s low PE Ratio (TTM) of 16.97.  Recall in one of my previous updates that I pointed out how Apple has the lowest PE Ratio of the FAANG stocks.  Note, I added in Microsoft and called it the “FAANGM” stocks. This fact still remains, with Apple being by far the cheapest of the high flying group of tech stocks.  This gives me safety from any serious downside risk and with a $192 set stop loss order, in the “worst-case scenario” I still would lock in a hefty profit. While on the other hand, for example, Netflix currently trades at a PE Ratio of 144.84, which would certainly cause me quite a fright if I was a current stockholder.  A valuation that high certainly degrades any notion of the words “margin of safety” when it comes to mitigating downside risk.  

As for Tilray, a current market cap of $4.47B still renders this sham company overvalued.  Although I will be looking to move out of this position soon. I believe in the upcoming election cannabis will take center stage as both parties pander to voters.  Hence, I rather not be on the losing end of a possible wave of optimism, especially when I’ve profited over roughly 25% so far. As for my next short idea generation, I’m almost ecstatic looking at Beyond Meat trading at $174 and a market cap of $10.47B.  Beyond Meat appears to be a Tilray 2.0 waiting for a crash, although I implore you to read my previous articles on the stock to understand why right now isn’t exactly a good short situation.    

Lastly, the markets as a whole don’t really inspire the optimist within me.  An actual Chiense trade deal would be a significant boost, but unlikely. For a little political commentary, I think China here is actually incentivized to stall talks in the short-term.  One should realize, that by doing so and continuing their industrial and Midwestern tariff targets, China and Xi Jinping can, at the least cut into Trump’s 2016 key supporters of farmers, miners and industrialists from swing-states such as Ohio, Michigan and Pennsylvania.  This might not flip the Presidential election, but China, through their tariff targets, can flip 2016 Republican House and Senate votes into 2020 Democratic support. What does this mean going forward? Well a Democratic majority would inhibit Trump in his tough stance against China and certainly limit his ability to deploy various economic and regulatory tools in the fight against China.  Hence, Trump would have much less bargaining power when coming to the talks table if China is able to weather the tariff storm past the 2020 election.

To wrap the political talk and stock commentary up, I would not expect a trade deal anytime soon.  With regards to Apple, I continue to hold steady and I intend to move out Tilray soon. All the while Beyond Meat slowly looks more and more like a lucrative potential short for later in the calendar year.             

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