Friday File Part Two – Portfolio News and Updates (GOOG, SPACs, IQ, FB, INTC, SWKS, MKL)

By Travis Johnson, Stock Gumshoe, April 27, 2018

Plenty has happened in the past week or so, as I’ve been on the road (both vacationing in the sun and working in the rain), so what’s up with the Real Money Portfolio?

On the news front we’ve gotten a lot of earnings reports since I last wrote to you — Alphabet and Facebook had very good and fantastic results, respectively, Amazon and Intel blew us all away again, IQ had a quarter just like it should have had following the IPO, and, well, what else?

I’ve made a few adjustments to the portfolio, mostly because I want to dial down the speculative holdings a little bit as we head into the spring and look for more long-term positions that I can open or add to (yes, it’s almost spring up here in the wilds of western Massachusetts)… so let me go into those sales first, quickly:

I sold my short-term speculative options in iQiyi (IQ) and Okta (OKTA) today… both have generated a decent profit in a relatively short period of time, and I think the underlying companies have good growth prospects, but they are quite volatile and the share prices could easily give up 10% if the market gets hairy for a few weeks again, so I’ll take the speculative profits instead of risking a 100% loss in those options stakes.

And because I have some other interesting long-term investments I’m considering, I decided to free up my SPAC investment capital by essentially converting them to “warrant only” positions. Estre Ambiental (ESTR) and Yatra Online (YTRA) were already warrant-only speculations, but MTech Acquisition (MTEC) and Social Capital Hedosophia (IPOA) were positions I bought at the IPO mostly because they offered cheap leverage with their attached warrants. So I’ve both upped the risk in these allocations and significantly decreased the actual amount of capital I have committed by giving up the shares and committing instead to the warrants. Neither MTech nor Social Capital has decided on an acquisition target, they have quite a bit of time left before they have to commit, so the risk here is that they’ll either fail to consummate a deal (and the warrants would be worthless at that point) or that they’ll buy something dumb (which is the perennial risk of all SPACs, and a pretty likely outcome if you go by the odds).

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