Friday File: Buying Beauty, Selling Ugly

by Travis Johnson, Stock Gumshoe | December 6, 2019 5:37 pm

Preparing for Recession... plus DocuSign, Ulta and Okta report, and I make a few buys and do some tax-loss harvesting

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Source URL: https://www.stockgumshoe.com/2019/12/friday-file-preparing-for-recession-plus-docusign-ulta-and-okta-report-and-i-make-a-few-buys-and-do-some-tax-loss-harvesting/


10 responses to “Friday File: Buying Beauty, Selling Ugly”

  1. dmgordon says:

    Re: The Trade Desk/TTD

    Long term investors will appreciate this recent and self-explanatory news item…

    Safe link:
    https://www.adexchanger.com/online-advertising/ad-buyers-starting-to-use-the-trade-desk-dsp-over-google-according-to-advertiser-perceptions-report/

  2. Braulio says:

    Appreciate the updates as I too own many of the stocks you mentioned, including Okta, TTD, Docu, WRTC, and lamentably Largo. I’m going to hold largo longer as it’s in an IRA so no tax advantage to selling it. Was hoping for an Ulta pullback to get in nearer to $200. Oh well, there’s always another. I’m short EL so I’ll have to see how that works out. (<1% position). Keep the ideas coming chief....

  3. money tree says:

    Thanks Travis for writing this:
    “Maybe if I write about this enough, I’ll even talk myself out of doing something stupid.”

    ha ha ha . Me too!– just when I’m convinced I know something, the rest of the world will prove me wrong. I quickly learned to resist making quick changes. – but I still fall for the emotional traps of investing. Long-term buy-and-hold has worked for almost all of the greatest investors- and for me as well.

  4. clemdane says:

    Excited as this is my first day/hour among the Irregulars! Finally upgraded.

    I got lucky with my LGORF (one of the extremely rare times I had good timing.) I sold mine at $1.30 for more than 30% gain, after which it plummeted to $.62. I’ve been kind of kicking myself for not buying back at $.62 because it’s recovered a little bit each day since then and is now at $.76. It’s a speculative play that I’d like to have a few of.

    SHOP is hard for me because no matter what future growth is forecast it always seems so richly valued already and I have trouble bringing myself to buy. Interesting to hear, though. I’m sure it’s a mistake not buying.

    I’ve made money on calls of DOCU and OKTA, but I somehow convinced myself to buy DDOG after the IPO and ended up selling at break even. I am leaning towards buying some DOCU for long term – your analysis helped a lot with that. Also, I use DocuSign at work on a daily basis. I like the idea of buying where I live.

  5. Trade Note:
    Today I continued the process of gradually selling down my Office Properties Income Trust (OPI) position. This is not a surprise, I’ve just mostly been looking for mid-$30s opportunities to take profits in a company that I don’t have any interest in holding long term. Here’s what I noted about it when I started selling about six weeks ago, in case you missed that comment, my thinking has not changed at all:

    (From Nov. 1) I was looking for 30%+ returns when I bought in the Spring, and we’ve just hit that point… so I’ll begin selling. They just reported, and their financial situation has improved a bit — they have plenty of cash flow to support their dividend, the occupancy rates have improved a little, and the property sales have made the income statement a bit confusing as they work to sell off assets and pay down debt (they also sold their RMR shares, which I think is a good thing), but it’s still a pretty weak company with an unexciting portfolio and substantial leverage. The potential for growth would be if they announce a meaningful dividend increase, which is possible next year, but I am not overly concerned about maximizing my return now that the shares of this not-great company have gone from “crazy undervalued” to just “reasonably cheap” — I’ll likely keep an eye on this and keep selling it off in pieces over the next several months, but we’ll see.

    And I put a little bit of that cash to work in increasing my Modern Times Group (MTG-B in Sweden) position by about 20%. No big news on them this week, but here’s my updated thinking:

    eSports company Modern Times Group is moving ahead with some more restructuring, last time they filed they were talking about reviewing their game publishing arm, this time it’s the core eSports business that is being impacted… though it’s fairly minor, it sounds like they’re essentially just centralizing their event production staff (for ESL and Dreamhack, I guess, their primary brand names) in Germany and Poland and cutting some production teams in France, Spain and maybe the UK. They’re not dropping events or local brands, just trying to become more efficient. Seems reasonable to me, though eSports is a pretty tight community so they’ll have to communicate their plans clearly and not risk turning people away from their market-leading brands in Europe.

    The real potential here is still more international expansion and added events under their umbrella, helped a bit by the strategic investment by Chinese streaming company Huya as they work to integrate the Chinese eSports world into the ESL schedule and events. I do expect MTG to look into a US listing as part of their restructuring (they’ve said as much), and that ought to help with visibility… so although there’s not really any urgency, and this restructuring will take time and there may not be news for a while, as some more cash piled up in the account this week I took the opportunity to increase my MTG position. If you’re new to the stock, this one does not trade in the US, not even over the counter, so it has to be bought on the Stockholm exchange if you’re interested (I use Interactive Brokers for trading on non-US markets, but most major brokers can trade in major overseas markets — sometimes with a higher commission or a phone call)… and for what it’s worth, I still also like both EA and ATVI as long-term plays on both eSports and the next console upgrade wave next year and I do still nibble on both of those stocks from time to time .

  6. meridian says:

    According to this inflation-adjusted chart (admittedly it’s only the Dow Jones), if you’d invested in the overall market in 1976, you’d have been down until 1988 – https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart. My concern is that today may be more similar to the late 1920s, when investing in the overall market would have meant being down for 30 years – tough to just stay the course for that long!
    Of course, there could also be a lot of upside from here, but I hope it excuses a certain amount of caution and staying on the sidelines. Thank you for all the great content, it helps me to be selective in my investments and balance the risk of being in the market with the risk of not being in the market.

  7. cartero says:

    Speaking of the stock market and the economy in general, where would we be without these trillion dollar deficits and how long can this go on? How can we use past performance to predict anything in the future when so much debt is needed to maintain economic growth?

  8. exit0 says:

    Tried seling a portion of my Fairfax India (FFXDF) shares but was blocked with a 144A restriction by Fidelity. No issues purchasing in 2017/18. Has anyone got around?

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